Correlation Between Hertz Global and Herc Holdings
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Herc Holdings 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 Herc Holdings 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 Herc Holdings, you can compare the effects of market volatilities on Hertz Global and Herc Holdings 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 Herc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Herc Holdings.
Diversification Opportunities for Hertz Global and Herc Holdings
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Herc is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc Holdings 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 Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of Hertz Global i.e., Hertz Global and Herc Holdings go up and down completely randomly.
Pair Corralation between Hertz Global and Herc Holdings
Assuming the 90 days horizon Hertz Global Hldgs is expected to under-perform the Herc Holdings. In addition to that, Hertz Global is 1.34 times more volatile than Herc Holdings. It trades about -0.05 of its total potential returns per unit of risk. Herc Holdings is currently generating about 0.05 per unit of volatility. If you would invest 12,678 in Herc Holdings on August 23, 2024 and sell it today you would earn a total of 9,098 from holding Herc Holdings or generate 71.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Hldgs vs. Herc Holdings
Performance |
| Timeline |
| Hertz Global Hldgs |
| Herc Holdings |
Hertz Global and Herc Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Herc Holdings
The main advantage of trading using opposite Hertz Global and Herc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Herc Holdings 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 Herc Holdings will offset losses from the drop in Herc Holdings' 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 |
| Herc Holdings vs. HE Equipment Services | Herc Holdings vs. Air Lease | Herc Holdings vs. Aquagold International | Herc Holdings vs. Small Cap Core |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |