Correlation Between Hertz Global and ATAI Life

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hertz Global and ATAI Life 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 ATAI Life 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 ATAI Life Sciences, you can compare the effects of market volatilities on Hertz Global and ATAI Life 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 ATAI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and ATAI Life.

Diversification Opportunities for Hertz Global and ATAI Life

0.42
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Hertz Global and ATAI Life

Considering the 90-day investment horizon Hertz Global Holdings is expected to under-perform the ATAI Life. But the stock apears to be less risky and, when comparing its historical volatility, Hertz Global Holdings is 2.75 times less risky than ATAI Life. The stock trades about -0.19 of its potential returns per unit of risk. The ATAI Life Sciences is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  293.00  in ATAI Life Sciences on September 11, 2022 and sell it today you would earn a total of  27.00  from holding ATAI Life Sciences or generate 9.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hertz Global Holdings  vs.  ATAI Life Sciences

 Performance (%) 
       Timeline  
Hertz Global Holdings 
Hertz Performance
0 of 100
Over the last 90 days Hertz Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for the company investors.

Hertz Price Channel

ATAI Life Sciences 
ATAI Life Performance
0 of 100
Over the last 90 days ATAI Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ATAI Life Price Channel

Hertz Global and ATAI Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hertz Global and ATAI Life

The main advantage of trading using opposite Hertz Global and ATAI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, ATAI Life 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 ATAI Life will offset losses from the drop in ATAI Life's long position.
Hertz Global vs. Advance Auto Parts
Hertz Global vs. China Automotive Systems
Hertz Global vs. Group 1 Automotive
Hertz Global vs. CarMax Inc
The idea behind Hertz Global Holdings and ATAI Life Sciences 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.
ATAI Life vs. Dupont De Nemours
ATAI Life vs. Alcoa Corp
ATAI Life vs. Coca-Cola Co
ATAI Life vs. Cisco Systems
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go