Correlation Between Hertz Global and ScanSource

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

By analyzing existing cross correlation between Hertz Global Hldgs and ScanSource, you can compare the effects of market volatilities on Hertz Global and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and ScanSource.

Diversification Opportunities for Hertz Global and ScanSource

0.3

Correlation Coefficient

Hertz Global  ScanSource

Weak diversification

The 3 months correlation between Hertz and ScanSource is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 Hldgs are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Hertz Global i.e., Hertz Global and ScanSource go up and down completely randomly.

Pair Corralation between Hertz Global and ScanSource

Assuming the 90 days horizon Hertz Global Hldgs is expected to under-perform the ScanSource. In addition to that, Hertz Global is 2.87 times more volatile than ScanSource. It trades about 0.0 of its total potential returns per unit of risk. ScanSource is currently generating about 0.07 per unit of volatility. If you would invest  4,068  in ScanSource on May 14, 2025 and sell it today you would earn a total of  274.00  from holding ScanSource or generate 6.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hertz Global Hldgs  vs.  ScanSource

Hertz Global Hldgs

Risk-Adjusted Performance

Weakest

Over the last 90 days Hertz Global Hldgs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hertz Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ScanSource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Hertz Global and ScanSource

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

The idea behind Hertz Global Hldgs and ScanSource 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.