Correlation Between Hertz Global and GATX
Can any of the company-specific risk be diversified away by investing in both Hertz Global and GATX 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 GATX 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 GATX Corporation, you can compare the effects of market volatilities on Hertz Global and GATX 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 GATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and GATX.
Diversification Opportunities for Hertz Global and GATX
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hertz and GATX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and GATX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX 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 GATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX has no effect on the direction of Hertz Global i.e., Hertz Global and GATX go up and down completely randomly.
Pair Corralation between Hertz Global and GATX
Assuming the 90 days horizon Hertz Global Hldgs is expected to under-perform the GATX. In addition to that, Hertz Global is 2.59 times more volatile than GATX Corporation. It trades about -0.02 of its total potential returns per unit of risk. GATX Corporation is currently generating about 0.09 per unit of volatility. If you would invest 13,395 in GATX Corporation on August 24, 2024 and sell it today you would earn a total of 2,495 from holding GATX Corporation or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Hldgs vs. GATX Corp.
Performance |
| Timeline |
| Hertz Global Hldgs |
| GATX |
Hertz Global and GATX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and GATX
The main advantage of trading using opposite Hertz Global and GATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, GATX 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 GATX will offset losses from the drop in GATX's 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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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