Correlation Between Hertz Global and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Jeld Wen 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 Jeld Wen 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 Jeld Wen Holding, you can compare the effects of market volatilities on Hertz Global and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Jeld Wen.
Diversification Opportunities for Hertz Global and Jeld Wen
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hertz and Jeld is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Hertz Global i.e., Hertz Global and Jeld Wen go up and down completely randomly.
Pair Corralation between Hertz Global and Jeld Wen
Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 0.66 times more return on investment than Jeld Wen. However, Hertz Global Holdings is 1.52 times less risky than Jeld Wen. It trades about 0.02 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.38 per unit of risk. If you would invest 425.00 in Hertz Global Holdings on November 28, 2024 and sell it today you would lose (1.00) from holding Hertz Global Holdings or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Jeld Wen Holding
Performance |
| Timeline |
| Hertz Global Holdings |
| Jeld Wen Holding |
Hertz Global and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Jeld Wen
The main advantage of trading using opposite Hertz Global and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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