Correlation Between Brooklyn ImmunoTherapeuti and Herc Holdings

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Can any of the company-specific risk be diversified away by investing in both Brooklyn ImmunoTherapeuti and Herc Holdings 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 Brooklyn ImmunoTherapeuti and Herc Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooklyn ImmunoTherapeutics In and Herc Holdings, you can compare the effects of market volatilities on Brooklyn ImmunoTherapeuti and Herc Holdings 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 Brooklyn ImmunoTherapeuti with a short position of Herc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooklyn ImmunoTherapeuti and Herc Holdings.

Diversification Opportunities for Brooklyn ImmunoTherapeuti and Herc Holdings

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brooklyn and Herc Holdings is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Brooklyn ImmunoTherapeutics In and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc Holdings and Brooklyn ImmunoTherapeuti 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 Brooklyn ImmunoTherapeutics In are associated (or correlated) with Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of Brooklyn ImmunoTherapeuti i.e., Brooklyn ImmunoTherapeuti and Herc Holdings go up and down completely randomly.

Pair Corralation between Brooklyn ImmunoTherapeuti and Herc Holdings

Considering the 90-day investment horizon Brooklyn ImmunoTherapeutics In is expected to under-perform the Herc Holdings. In addition to that, Brooklyn ImmunoTherapeuti is 2.23 times more volatile than Herc Holdings. It trades about -0.08 of its total potential returns per unit of risk. Herc Holdings is currently generating about 0.13 per unit of volatility. If you would invest  10,878  in Herc Holdings on September 1, 2022 and sell it today you would earn a total of  1,849  from holding Herc Holdings or generate 17.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.56%
ValuesDaily Returns

Brooklyn ImmunoTherapeutics In  vs.  Herc Holdings

 Performance (%) 
       Timeline  
Brooklyn ImmunoTherapeuti 
Brooklyn Performance
0 of 100
Over the last 90 days Brooklyn ImmunoTherapeutics In has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Brooklyn Price Channel

Herc Holdings 
Herc Holdings Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Herc Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Herc Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Herc Holdings Price Channel

Brooklyn ImmunoTherapeuti and Herc Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brooklyn ImmunoTherapeuti and Herc Holdings

The main advantage of trading using opposite Brooklyn ImmunoTherapeuti and Herc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooklyn ImmunoTherapeuti position performs unexpectedly, Herc Holdings 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 Herc Holdings will offset losses from the drop in Herc Holdings' long position.
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The idea behind Brooklyn ImmunoTherapeutics In and Herc 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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