Correlation Between Hertz Global and MDB Capital
Can any of the company-specific risk be diversified away by investing in both Hertz Global and MDB Capital 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 MDB Capital 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 MDB Capital Holdings,, you can compare the effects of market volatilities on Hertz Global and MDB Capital 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 MDB Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and MDB Capital.
Diversification Opportunities for Hertz Global and MDB Capital
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hertz and MDB is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and MDB Capital Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDB Capital Holdings, 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 MDB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDB Capital Holdings, has no effect on the direction of Hertz Global i.e., Hertz Global and MDB Capital go up and down completely randomly.
Pair Corralation between Hertz Global and MDB Capital
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the MDB Capital. But the stock apears to be less risky and, when comparing its historical volatility, Hertz Global Holdings is 1.07 times less risky than MDB Capital. The stock trades about -0.07 of its potential returns per unit of risk. The MDB Capital Holdings, is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,250 in MDB Capital Holdings, on September 12, 2024 and sell it today you would lose (625.00) from holding MDB Capital Holdings, or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.35% |
| Values | Daily Returns |
Hertz Global Holdings vs. MDB Capital Holdings,
Performance |
| Timeline |
| Hertz Global Holdings |
| MDB Capital Holdings, |
Hertz Global and MDB Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and MDB Capital
The main advantage of trading using opposite Hertz Global and MDB Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, MDB Capital 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 MDB Capital will offset losses from the drop in MDB Capital's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| MDB Capital vs. Hertz Global Holdings | MDB Capital vs. Fortress Transp Infra | MDB Capital vs. HE Equipment Services | MDB Capital vs. Uranium Energy Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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