Correlation Between Mill City and Hertz Global

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

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

Diversification Opportunities for Mill City and Hertz Global

-0.24

Correlation Coefficient

Mill City  Hertz Global

Very good diversification

The 3 months correlation between Mill and Hertz is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings and Mill City 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 Mill City Ventures 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 Holdings has no effect on the direction of Mill City i.e., Mill City and Hertz Global go up and down completely randomly.

Pair Corralation between Mill City and Hertz Global

Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Hertz Global. But the stock apears to be less risky and, when comparing its historical volatility, Mill City Ventures is 1.32 times less risky than Hertz Global. The stock trades about -0.11 of its potential returns per unit of risk. The Hertz Global Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  336.00  in Hertz Global Holdings on September 21, 2024 and sell it today you would lose (9.00) from holding Hertz Global Holdings or give up 2.68% of portfolio value over 90 days.

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

Mill City Ventures  vs.  Hertz Global Holdings

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.

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.

Pair Trading with Mill City and Hertz Global

The main advantage of trading using opposite Mill City and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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.

The idea behind Mill City Ventures and Hertz Global Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.