Correlation Between FEMALE HEALTH and Avis Budget

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

By analyzing existing cross correlation between FEMALE HEALTH and Avis Budget Group, you can compare the effects of market volatilities on FEMALE HEALTH and Avis Budget 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 FEMALE HEALTH with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Avis Budget.

Diversification Opportunities for FEMALE HEALTH and Avis Budget

0.42

Correlation Coefficient

FEMALE HEALTH  Avis Budget

Very weak diversification

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

Pair Corralation between FEMALE HEALTH and Avis Budget

Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 15.72 times less return on investment than Avis Budget. In addition to that, FEMALE HEALTH is 1.07 times more volatile than Avis Budget Group. It trades about 0.02 of its total potential returns per unit of risk. Avis Budget Group is currently generating about 0.33 per unit of volatility. If you would invest  8,070  in Avis Budget Group on April 25, 2025 and sell it today you would earn a total of  8,900  from holding Avis Budget Group or generate 110.29% return on investment over 90 days.

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

FEMALE HEALTH  vs.  Avis Budget Group

FEMALE HEALTH

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FEMALE HEALTH are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, FEMALE HEALTH is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Avis Budget Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Avis Budget Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Avis Budget reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FEMALE HEALTH and Avis Budget

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

The idea behind FEMALE HEALTH and Avis Budget Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.