Correlation Between Hertz Global and U Haul
Can any of the company-specific risk be diversified away by investing in both Hertz Global and U Haul 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 U Haul 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 U Haul Holding, you can compare the effects of market volatilities on Hertz Global and U Haul 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 U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and U Haul.
Diversification Opportunities for Hertz Global and U Haul
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hertz and UHAL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul 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 U Haul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of Hertz Global i.e., Hertz Global and U Haul go up and down completely randomly.
Pair Corralation between Hertz Global and U Haul
Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 3.38 times more return on investment than U Haul. However, Hertz Global is 3.38 times more volatile than U Haul Holding. It trades about 0.13 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.02 per unit of risk. If you would invest 320.00 in Hertz Global Holdings on August 29, 2024 and sell it today you would earn a total of 132.00 from holding Hertz Global Holdings or generate 41.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. U Haul Holding
Performance |
| Timeline |
| Hertz Global Holdings |
| U Haul Holding |
Hertz Global and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and U Haul
The main advantage of trading using opposite Hertz Global and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, U Haul 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 U Haul will offset losses from the drop in U Haul'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 Transaction History module to view history of all your transactions and understand their impact on performance.
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