Correlation Between Hertz Global and Black Diamond
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Black Diamond 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 Black Diamond 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 Black Diamond Group, you can compare the effects of market volatilities on Hertz Global and Black Diamond 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 Black Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Black Diamond.
Diversification Opportunities for Hertz Global and Black Diamond
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hertz and Black is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Black Diamond Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Diamond Group 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 Black Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Diamond Group has no effect on the direction of Hertz Global i.e., Hertz Global and Black Diamond go up and down completely randomly.
Pair Corralation between Hertz Global and Black Diamond
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Black Diamond. In addition to that, Hertz Global is 1.94 times more volatile than Black Diamond Group. It trades about -0.05 of its total potential returns per unit of risk. Black Diamond Group is currently generating about 0.06 per unit of volatility. If you would invest 432.00 in Black Diamond Group on November 2, 2024 and sell it today you would earn a total of 211.00 from holding Black Diamond Group or generate 48.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.3% |
| Values | Daily Returns |
Hertz Global Holdings vs. Black Diamond Group
Performance |
| Timeline |
| Hertz Global Holdings |
| Black Diamond Group |
Hertz Global and Black Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Black Diamond
The main advantage of trading using opposite Hertz Global and Black Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Black Diamond 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 Black Diamond will offset losses from the drop in Black Diamond's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Black Diamond vs. Berkshire Hathaway | Black Diamond vs. First Physicians Capital | Black Diamond vs. Transcode Therapeutics | Black Diamond vs. Ashford Hospitality Trust |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |