Correlation Between Hertz Global and First Trust
Can any of the company-specific risk be diversified away by investing in both Hertz Global and First Trust 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 First Trust 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 First Trust Multi, you can compare the effects of market volatilities on Hertz Global and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and First Trust.
Diversification Opportunities for Hertz Global and First Trust
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and First is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and First Trust Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Multi 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Multi has no effect on the direction of Hertz Global i.e., Hertz Global and First Trust go up and down completely randomly.
Pair Corralation between Hertz Global and First Trust
Considering the 90-day investment horizon Hertz Global is expected to generate 5.82 times less return on investment than First Trust. In addition to that, Hertz Global is 5.15 times more volatile than First Trust Multi. It trades about 0.01 of its total potential returns per unit of risk. First Trust Multi is currently generating about 0.2 per unit of volatility. If you would invest 14,151 in First Trust Multi on June 12, 2025 and sell it today you would earn a total of 1,602 from holding First Trust Multi or generate 11.32% 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. First Trust Multi
Performance |
| Timeline |
| Hertz Global Holdings |
| First Trust Multi |
Hertz Global and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and First Trust
The main advantage of trading using opposite Hertz Global and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Hertz Global vs. Hertz Global Hldgs | Hertz Global vs. Avis Budget Group | Hertz Global vs. Ryder System | Hertz Global vs. United Rentals |
| First Trust vs. First Trust Multi | First Trust vs. First Trust Small | First Trust vs. First Trust Large | First Trust vs. First Trust Large |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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