Correlation Between Boston Beer and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Hertz Global Holdings, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Hertz Global.
Diversification Opportunities for Boston Beer and Hertz Global
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and Hertz is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Hertz Global go up and down completely randomly.
Pair Corralation between Boston Beer and Hertz Global
Considering the 90-day investment horizon Boston Beer is expected to generate 2.72 times less return on investment than Hertz Global. But when comparing it to its historical volatility, Boston Beer is 3.11 times less risky than Hertz Global. It trades about 0.15 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 329.00 in Hertz Global Holdings on August 28, 2024 and sell it today you would earn a total of 129.00 from holding Hertz Global Holdings or generate 39.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Hertz Global Holdings
Performance |
| Timeline |
| Boston Beer |
| Hertz Global Holdings |
Boston Beer and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Hertz Global
The main advantage of trading using opposite Boston Beer and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Budweiser Brewing | Boston Beer vs. Anheuser Busch InBev SANV | Boston Beer vs. Ambev SA ADR | Boston Beer vs. Fomento Economico Mexicano |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |