Correlation Between Hertz Global and MBGGR

Can any of the company-specific risk be diversified away by investing in both Hertz Global and MBGGR 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 MBGGR 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 MBGGR 345 06 JAN 27, you can compare the effects of market volatilities on Hertz Global and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and MBGGR.

Diversification Opportunities for Hertz Global and MBGGR

0.01

Correlation Coefficient

Hertz Global  MBGGR

Significant diversification

The 3 months correlation between Hertz and MBGGR is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and MBGGR 345 06 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 345 06 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 345 06 has no effect on the direction of Hertz Global i.e., Hertz Global and MBGGR go up and down completely randomly.

Pair Corralation between Hertz Global and MBGGR

Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 15.38 times more return on investment than MBGGR. However, Hertz Global is 15.38 times more volatile than MBGGR 345 06 JAN 27. It trades about 0.03 of its potential returns per unit of risk. MBGGR 345 06 JAN 27 is currently generating about -0.3 per unit of risk. If you would invest  336.00  in Hertz Global Holdings on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Hertz Global Holdings or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.54%
Values	Daily Returns

Hertz Global Holdings  vs.  MBGGR 345 06 JAN 27

Hertz Global Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hertz Global Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hertz Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MBGGR 345 06

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 345 06 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MBGGR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hertz Global and MBGGR

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

The idea behind Hertz Global Holdings and MBGGR 345 06 JAN 27 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.

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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.