Correlation Between Herc Holdings and JX Luxventure

Can any of the company-specific risk be diversified away by investing in both Herc Holdings and JX Luxventure 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 Herc Holdings and JX Luxventure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Herc Holdings and JX Luxventure Limited, you can compare the effects of market volatilities on Herc Holdings and JX Luxventure 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 Herc Holdings with a short position of JX Luxventure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and JX Luxventure.

Diversification Opportunities for Herc Holdings and JX Luxventure

-0.14

Correlation Coefficient

Herc Holdings  JX Luxventure

Good diversification

The 3 months correlation between Herc and JXG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited and Herc Holdings 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 Herc Holdings are associated (or correlated) with JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of Herc Holdings i.e., Herc Holdings and JX Luxventure go up and down completely randomly.

Pair Corralation between Herc Holdings and JX Luxventure

Considering the 90-day investment horizon Herc Holdings is expected to under-perform the JX Luxventure. But the stock apears to be less risky and, when comparing its historical volatility, Herc Holdings is 14.68 times less risky than JX Luxventure. The stock trades about -0.09 of its potential returns per unit of risk. The JX Luxventure Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  122.00  in JX Luxventure Limited on October 25, 2024 and sell it today you would earn a total of  128.00  from holding JX Luxventure Limited or generate 104.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

Herc Holdings  vs.  JX Luxventure Limited

Herc Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Herc Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Herc Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

JX Luxventure Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JX Luxventure Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, JX Luxventure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Herc Holdings and JX Luxventure

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

The idea behind Herc Holdings and JX Luxventure Limited 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.