Correlation Between Hertz Global and Tenaris SA

Can any of the company-specific risk be diversified away by investing in both Hertz Global and Tenaris SA 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 Tenaris SA 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 Tenaris SA, you can compare the effects of market volatilities on Hertz Global and Tenaris SA 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 Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Tenaris SA.

Diversification Opportunities for Hertz Global and Tenaris SA

0.57

Correlation Coefficient

Hertz Global  Tenaris SA

Very weak diversification

The 3 months correlation between Hertz and Tenaris is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA 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 Tenaris SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaris SA has no effect on the direction of Hertz Global i.e., Hertz Global and Tenaris SA go up and down completely randomly.

Pair Corralation between Hertz Global and Tenaris SA

Considering the 90-day investment horizon Hertz Global is expected to generate 2.22 times less return on investment than Tenaris SA. In addition to that, Hertz Global is 3.35 times more volatile than Tenaris SA. It trades about 0.01 of its total potential returns per unit of risk. Tenaris SA is currently generating about 0.11 per unit of volatility. If you would invest  1,723  in Tenaris SA on May 5, 2025 and sell it today you would earn a total of  178.00  from holding Tenaris SA or generate 10.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Hertz Global Holdings  vs.  Tenaris SA

Hertz Global Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hertz Global Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Hertz Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tenaris SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Tenaris SA may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Hertz Global and Tenaris SA

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

The idea behind Hertz Global Holdings and Tenaris SA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.