Correlation Between Hertz Global and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Vita Coco 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 Vita Coco 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 Vita Coco, you can compare the effects of market volatilities on Hertz Global and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Vita Coco.
Diversification Opportunities for Hertz Global and Vita Coco
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hertz and Vita is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Hertz Global i.e., Hertz Global and Vita Coco go up and down completely randomly.
Pair Corralation between Hertz Global and Vita Coco
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Vita Coco. In addition to that, Hertz Global is 1.4 times more volatile than Vita Coco. It trades about -0.04 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.08 per unit of volatility. If you would invest 1,364 in Vita Coco on August 31, 2024 and sell it today you would earn a total of 2,190 from holding Vita Coco or generate 160.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hertz Global Holdings vs. Vita Coco
Performance |
| Timeline |
| Hertz Global Holdings |
| Vita Coco |
Hertz Global and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Vita Coco
The main advantage of trading using opposite Hertz Global and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Air Lease |
| Vita Coco vs. Monster Beverage Corp | Vita Coco vs. RLJ Lodging Trust | Vita Coco vs. Aquagold International | Vita Coco vs. Stepstone Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |