Correlation Between Hertz Global and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Custom Truck 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 Custom Truck 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 Custom Truck One, you can compare the effects of market volatilities on Hertz Global and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Custom Truck.
Diversification Opportunities for Hertz Global and Custom Truck
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hertz and Custom is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Hertz Global i.e., Hertz Global and Custom Truck go up and down completely randomly.
Pair Corralation between Hertz Global and Custom Truck
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Custom Truck. In addition to that, Hertz Global is 1.43 times more volatile than Custom Truck One. It trades about -0.03 of its total potential returns per unit of risk. Custom Truck One is currently generating about 0.0 per unit of volatility. If you would invest 669.00 in Custom Truck One on August 29, 2024 and sell it today you would lose (89.00) from holding Custom Truck One or give up 13.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Custom Truck One
Performance |
| Timeline |
| Hertz Global Holdings |
| Custom Truck One |
Hertz Global and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Custom Truck
The main advantage of trading using opposite Hertz Global and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |