Correlation Between Minor International and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Minor International 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 Minor International and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International PCL and Hertz Global Holdings, you can compare the effects of market volatilities on Minor International 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 Minor International with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and Hertz Global.
Diversification Opportunities for Minor International and Hertz Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Minor and Hertz is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Minor International PCL 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 Minor International 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 Minor International PCL 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 Minor International i.e., Minor International and Hertz Global go up and down completely randomly.
Pair Corralation between Minor International and Hertz Global
Assuming the 90 days horizon Minor International PCL is expected to generate 0.34 times more return on investment than Hertz Global. However, Minor International PCL is 2.98 times less risky than Hertz Global. It trades about -0.01 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about -0.03 per unit of risk. If you would invest 2,269 in Minor International PCL on September 14, 2024 and sell it today you would lose (92.00) from holding Minor International PCL or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 58.36% |
| Values | Daily Returns |
Minor International PCL vs. Hertz Global Holdings
Performance |
| Timeline |
| Minor International PCL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hertz Global Holdings |
Minor International and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and Hertz Global
The main advantage of trading using opposite Minor International and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International 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.| Minor International vs. Alaska Air Group | Minor International vs. American Airlines Group | Minor International vs. Southwest Airlines | Minor International vs. Delta Air Lines |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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