Correlation Between Hertz Global and First Ship
Can any of the company-specific risk be diversified away by investing in both Hertz Global and First Ship 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 First Ship 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 First Ship Lease, you can compare the effects of market volatilities on Hertz Global and First Ship 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 First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and First Ship.
Diversification Opportunities for Hertz Global and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hertz and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of Hertz Global i.e., Hertz Global and First Ship go up and down completely randomly.
Pair Corralation between Hertz Global and First Ship
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the First Ship. In addition to that, Hertz Global is 1.45 times more volatile than First Ship Lease. It trades about -0.06 of its total potential returns per unit of risk. First Ship Lease is currently generating about 0.05 per unit of volatility. If you would invest 2.50 in First Ship Lease on August 27, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. First Ship Lease
Performance |
| Timeline |
| Hertz Global Holdings |
| First Ship Lease |
Hertz Global and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and First Ship
The main advantage of trading using opposite Hertz Global and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| First Ship vs. United Rentals | First Ship vs. AerCap Holdings NV | First Ship vs. Fortress Transp Infra | First Ship vs. U Haul Holding |
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.
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