Correlation Between Turning Point and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Hertz Global Holdings, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Hertz Global.
Diversification Opportunities for Turning Point and Hertz Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Turning and Hertz is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Hertz Global go up and down completely randomly.
Pair Corralation between Turning Point and Hertz Global
Considering the 90-day investment horizon Turning Point is expected to generate 1.58 times less return on investment than Hertz Global. But when comparing it to its historical volatility, Turning Point Brands is 2.22 times less risky than Hertz Global. It trades about 0.55 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Hertz Global Holdings on August 31, 2024 and sell it today you would earn a total of 157.00 from holding Hertz Global Holdings or generate 51.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Hertz Global Holdings
Performance |
| Timeline |
| Turning Point Brands |
| Hertz Global Holdings |
Turning Point and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Hertz Global
The main advantage of trading using opposite Turning Point and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Air Lease |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |