Correlation Between Keurig Dr and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Keurig Dr and Hertz Global 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 Keurig Dr and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keurig Dr Pepper and Hertz Global Holdings, you can compare the effects of market volatilities on Keurig Dr and Hertz Global 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 Keurig Dr with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Hertz Global.
Diversification Opportunities for Keurig Dr and Hertz Global
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Keurig and Hertz is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings and Keurig Dr 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 Keurig Dr Pepper are associated (or correlated) with Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of Keurig Dr i.e., Keurig Dr and Hertz Global go up and down completely randomly.
Pair Corralation between Keurig Dr and Hertz Global
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Hertz Global. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 4.21 times less risky than Hertz Global. The stock trades about -0.16 of its potential returns per unit of risk. The Hertz Global Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 299.00 in Hertz Global Holdings on September 2, 2024 and sell it today you would earn a total of 193.00 from holding Hertz Global Holdings or generate 64.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Hertz Global Holdings
Performance |
| Timeline |
| Keurig Dr Pepper |
| Hertz Global Holdings |
Keurig Dr and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Hertz Global
The main advantage of trading using opposite Keurig Dr and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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