Correlation Between Hertz Global and AZN Capital

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

By analyzing existing cross correlation between Hertz Global Hldgs and AZN Capital Corp, you can compare the effects of market volatilities on Hertz Global and AZN Capital 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 AZN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and AZN Capital.

Diversification Opportunities for Hertz Global and AZN Capital

0.0

Correlation Coefficient

Hertz Global  AZN Capital

Pay attention - limited upside

The 3 months correlation between Hertz and AZN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and AZN Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AZN Capital Corp 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 Hldgs are associated (or correlated) with AZN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AZN Capital Corp has no effect on the direction of Hertz Global i.e., Hertz Global and AZN Capital go up and down completely randomly.

Pair Corralation between Hertz Global and AZN Capital

If you would invest  243.00  in Hertz Global Hldgs on September 3, 2024 and sell it today you would earn a total of  45.00  from holding Hertz Global Hldgs or generate 18.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Hertz Global Hldgs  vs.  AZN Capital Corp

Hertz Global Hldgs

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hertz Global Hldgs are ranked lower than 10 (%) 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.

AZN Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AZN Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AZN Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hertz Global and AZN Capital

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

The idea behind Hertz Global Hldgs and AZN Capital Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.