Correlation Between Hertz Global and Aarons
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Aarons 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 Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Hldgs and The Aarons, you can compare the effects of market volatilities on Hertz Global and Aarons 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 Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Aarons.
Diversification Opportunities for Hertz Global and Aarons
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Aarons is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons 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 Hldgs are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Hertz Global i.e., Hertz Global and Aarons go up and down completely randomly.
Pair Corralation between Hertz Global and Aarons
If you would invest 190.00 in Hertz Global Hldgs on August 24, 2024 and sell it today you would earn a total of 30.00 from holding Hertz Global Hldgs or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Hertz Global Hldgs vs. The Aarons
Performance |
| Timeline |
| Hertz Global Hldgs |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Hertz Global and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Aarons
The main advantage of trading using opposite Hertz Global and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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