Correlation Between Hertz Global and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Mitsubishi UFJ 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 Mitsubishi UFJ 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 Mitsubishi UFJ Lease, you can compare the effects of market volatilities on Hertz Global and Mitsubishi UFJ 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 Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Mitsubishi UFJ.
Diversification Opportunities for Hertz Global and Mitsubishi UFJ
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Mitsubishi is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Mitsubishi UFJ Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ 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 Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Lease has no effect on the direction of Hertz Global i.e., Hertz Global and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Hertz Global and Mitsubishi UFJ
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Mitsubishi UFJ. But the stock apears to be less risky and, when comparing its historical volatility, Hertz Global Holdings is 1.19 times less risky than Mitsubishi UFJ. The stock trades about -0.05 of its potential returns per unit of risk. The Mitsubishi UFJ Lease is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 848.00 in Mitsubishi UFJ Lease on August 27, 2024 and sell it today you would earn a total of 348.00 from holding Mitsubishi UFJ Lease or generate 41.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.52% |
| Values | Daily Returns |
Hertz Global Holdings vs. Mitsubishi UFJ Lease
Performance |
| Timeline |
| Hertz Global Holdings |
| Mitsubishi UFJ Lease |
Hertz Global and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Mitsubishi UFJ
The main advantage of trading using opposite Hertz Global and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Mitsubishi UFJ vs. Visa Class A | Mitsubishi UFJ vs. Mastercard | Mitsubishi UFJ vs. American Express | Mitsubishi UFJ vs. PayPal Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |