Correlation Between Uber Technologies and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Uber Technologies 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 Uber Technologies and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Hertz Global Holdings, you can compare the effects of market volatilities on Uber Technologies 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 Uber Technologies with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Hertz Global.
Diversification Opportunities for Uber Technologies and Hertz Global
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Uber and Hertz is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies 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 Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and Hertz Global go up and down completely randomly.
Pair Corralation between Uber Technologies and Hertz Global
Given the investment horizon of 90 days Uber Technologies is expected to generate 0.59 times more return on investment than Hertz Global. However, Uber Technologies is 1.7 times less risky than Hertz Global. It trades about 0.08 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about -0.06 per unit of risk. If you would invest 3,390 in Uber Technologies on August 27, 2024 and sell it today you would earn a total of 3,761 from holding Uber Technologies or generate 110.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Hertz Global Holdings
Performance |
| Timeline |
| Uber Technologies |
| Hertz Global Holdings |
Uber Technologies and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Hertz Global
The main advantage of trading using opposite Uber Technologies and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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.| Uber Technologies vs. Kingsoft Cloud Holdings | Uber Technologies vs. AMTD Digital | Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake |
| 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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