Correlation Between Old Dominion and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Old Dominion 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 Old Dominion and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Hertz Global Holdings, you can compare the effects of market volatilities on Old Dominion 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 Old Dominion with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Hertz Global.
Diversification Opportunities for Old Dominion and Hertz Global
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Hertz is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight 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 Old Dominion 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 Old Dominion Freight 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 Old Dominion i.e., Old Dominion and Hertz Global go up and down completely randomly.
Pair Corralation between Old Dominion and Hertz Global
Given the investment horizon of 90 days Old Dominion is expected to generate 3.78 times less return on investment than Hertz Global. But when comparing it to its historical volatility, Old Dominion Freight is 1.86 times less risky than Hertz Global. It trades about 0.18 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Hertz Global Holdings on August 29, 2024 and sell it today you would earn a total of 156.00 from holding Hertz Global Holdings or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Hertz Global Holdings
Performance |
| Timeline |
| Old Dominion Freight |
| Hertz Global Holdings |
Old Dominion and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Hertz Global
The main advantage of trading using opposite Old Dominion and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion 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.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |