Correlation Between Hertz Global and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Old Dominion 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 Old Dominion 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 Old Dominion Freight, you can compare the effects of market volatilities on Hertz Global and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Old Dominion.
Diversification Opportunities for Hertz Global and Old Dominion
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hertz and Old is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Hertz Global i.e., Hertz Global and Old Dominion go up and down completely randomly.
Pair Corralation between Hertz Global and Old Dominion
Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Old Dominion. In addition to that, Hertz Global is 2.23 times more volatile than Old Dominion Freight. It trades about -0.07 of its total potential returns per unit of risk. Old Dominion Freight is currently generating about 0.02 per unit of volatility. If you would invest 20,308 in Old Dominion Freight on August 26, 2024 and sell it today you would earn a total of 1,717 from holding Old Dominion Freight or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Old Dominion Freight
Performance |
| Timeline |
| Hertz Global Holdings |
| Old Dominion Freight |
Hertz Global and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Old Dominion
The main advantage of trading using opposite Hertz Global and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |