Correlation Between Hertz Global and Sothebys

Can any of the company-specific risk be diversified away by investing in both Hertz Global and Sothebys 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 Sothebys 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 Sothebys 7375 percent, you can compare the effects of market volatilities on Hertz Global and Sothebys 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 Sothebys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Sothebys.

Diversification Opportunities for Hertz Global and Sothebys

0.09

Correlation Coefficient

Hertz Global  Sothebys

Significant diversification

The 3 months correlation between Hertz and Sothebys is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Sothebys 7375 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sothebys 7375 percent 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 Sothebys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sothebys 7375 percent has no effect on the direction of Hertz Global i.e., Hertz Global and Sothebys go up and down completely randomly.

Pair Corralation between Hertz Global and Sothebys

Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the Sothebys. In addition to that, Hertz Global is 3.46 times more volatile than Sothebys 7375 percent. It trades about -0.04 of its total potential returns per unit of risk. Sothebys 7375 percent is currently generating about 0.01 per unit of volatility. If you would invest  9,250  in Sothebys 7375 percent on September 28, 2024 and sell it today you would lose (7.00) from holding Sothebys 7375 percent or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.04%
Values	Daily Returns

Hertz Global Holdings  vs.  Sothebys 7375 percent

Hertz Global Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hertz Global Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hertz Global showed solid returns over the last few months and may actually be approaching a breakup point.

Sothebys 7375 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sothebys 7375 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sothebys is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hertz Global and Sothebys

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

The idea behind Hertz Global Holdings and Sothebys 7375 percent 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 Stocks Directory module to find actively traded stocks across global markets.