Correlation Between Hertz Global and Above Food
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Above Food at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hertz Global and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Holdings and Above Food Ingredients, you can compare the effects of market volatilities on Hertz Global and Above Food and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hertz Global with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Above Food.
Diversification Opportunities for Hertz Global and Above Food
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Above is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Hertz Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hertz Global Holdings are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Hertz Global i.e., Hertz Global and Above Food go up and down completely randomly.
Pair Corralation between Hertz Global and Above Food
Considering the 90-day investment horizon Hertz Global is expected to generate 2.51 times less return on investment than Above Food. But when comparing it to its historical volatility, Hertz Global Holdings is 5.35 times less risky than Above Food. It trades about 0.39 of its potential returns per unit of risk. Above Food Ingredients is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1.37 in Above Food Ingredients on August 31, 2024 and sell it today you would earn a total of 0.73 from holding Above Food Ingredients or generate 53.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Above Food Ingredients
Performance |
| Timeline |
| Hertz Global Holdings |
| Above Food Ingredients |
Hertz Global and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Above Food
The main advantage of trading using opposite Hertz Global and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Above Food can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Above Food will offset losses from the drop in Above Food's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Air Lease |
| Above Food vs. Ainsworth Game Technology | Above Food vs. Willscot Mobile Mini | Above Food vs. Avis Budget Group | Above Food vs. Hertz Global Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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