Correlation Between United Rentals and Hertz Global
Can any of the company-specific risk be diversified away by investing in both United Rentals 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 United Rentals and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Hertz Global Hldgs, you can compare the effects of market volatilities on United Rentals 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 United Rentals with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Hertz Global.
Diversification Opportunities for United Rentals and Hertz Global
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Hertz is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Hertz Global Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Hldgs and United Rentals 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 United Rentals 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 Hldgs has no effect on the direction of United Rentals i.e., United Rentals and Hertz Global go up and down completely randomly.
Pair Corralation between United Rentals and Hertz Global
Considering the 90-day investment horizon United Rentals is expected to generate 2.24 times less return on investment than Hertz Global. But when comparing it to its historical volatility, United Rentals is 2.23 times less risky than Hertz Global. It trades about 0.22 of its potential returns per unit of risk. Hertz Global Hldgs is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Hertz Global Hldgs on October 20, 2024 and sell it today you would earn a total of 37.00 from holding Hertz Global Hldgs or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Hertz Global Hldgs
Performance |
| Timeline |
| United Rentals |
| Hertz Global Hldgs |
United Rentals and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Hertz Global
The main advantage of trading using opposite United Rentals and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals 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.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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