Correlation Between Hertz Global and Mill City

Can any of the company-specific risk be diversified away by investing in both Hertz Global and Mill City 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 Hertz Global and Mill City into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hertz Global Holdings and Mill City Ventures, you can compare the effects of market volatilities on Hertz Global and Mill City 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 Hertz Global with a short position of Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Mill City.

Diversification Opportunities for Hertz Global and Mill City

-0.24

Correlation Coefficient

Hertz Global  Mill City

Very good diversification

The 3 months correlation between Hertz and Mill is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures and Hertz Global 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 Hertz Global Holdings are associated (or correlated) with Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Hertz Global i.e., Hertz Global and Mill City go up and down completely randomly.

Pair Corralation between Hertz Global and Mill City

Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Mill City. In addition to that, Hertz Global is 1.76 times more volatile than Mill City Ventures. It trades about -0.08 of its total potential returns per unit of risk. Mill City Ventures is currently generating about 0.14 per unit of volatility. If you would invest  179.00  in Mill City Ventures on September 21, 2024 and sell it today you would earn a total of  14.00  from holding Mill City Ventures or generate 7.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hertz Global Holdings  vs.  Mill City Ventures

Hertz Global Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hertz Global Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Hertz Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mill City Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mill City Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hertz Global and Mill City

The main advantage of trading using opposite Hertz Global and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City's long position.

The idea behind Hertz Global Holdings and Mill City Ventures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.