Correlation Between Hertz Global and Nova Lithium
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Nova Lithium 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 Nova Lithium 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 Nova Lithium Corp, you can compare the effects of market volatilities on Hertz Global and Nova Lithium 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 Nova Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Nova Lithium.
Diversification Opportunities for Hertz Global and Nova Lithium
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hertz and Nova is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Nova Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Lithium 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 Holdings are associated (or correlated) with Nova Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Lithium Corp has no effect on the direction of Hertz Global i.e., Hertz Global and Nova Lithium go up and down completely randomly.
Pair Corralation between Hertz Global and Nova Lithium
Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 0.46 times more return on investment than Nova Lithium. However, Hertz Global Holdings is 2.16 times less risky than Nova Lithium. It trades about 0.01 of its potential returns per unit of risk. Nova Lithium Corp is currently generating about -0.05 per unit of risk. If you would invest 362.00 in Hertz Global Holdings on December 27, 2024 and sell it today you would lose (17.00) from holding Hertz Global Holdings or give up 4.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hertz Global Holdings vs. Nova Lithium Corp
Performance |
Timeline |
Hertz Global Holdings |
Nova Lithium Corp |
Hertz Global and Nova Lithium Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hertz Global and Nova Lithium
The main advantage of trading using opposite Hertz Global and Nova Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Nova Lithium 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 Nova Lithium will offset losses from the drop in Nova Lithium's long position.Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
Nova Lithium vs. WEC Energy Group | Nova Lithium vs. NiSource | Nova Lithium vs. Magna International | Nova Lithium vs. Atmos Energy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |