Correlation Between Emeco Holdings and PROG Holdings
Can any of the company-specific risk be diversified away by investing in both Emeco Holdings and PROG 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 Emeco Holdings and PROG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emeco Holdings Limited and PROG Holdings, you can compare the effects of market volatilities on Emeco Holdings and PROG 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 Emeco Holdings with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emeco Holdings and PROG Holdings.
Diversification Opportunities for Emeco Holdings and PROG Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emeco and PROG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emeco Holdings Limited and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and Emeco Holdings 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 Emeco Holdings Limited are associated (or correlated) with PROG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROG Holdings has no effect on the direction of Emeco Holdings i.e., Emeco Holdings and PROG Holdings go up and down completely randomly.
Pair Corralation between Emeco Holdings and PROG Holdings
Assuming the 90 days horizon Emeco Holdings is expected to generate 26.34 times less return on investment than PROG Holdings. But when comparing it to its historical volatility, Emeco Holdings Limited is 2.03 times less risky than PROG Holdings. It trades about 0.01 of its potential returns per unit of risk. PROG Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,742 in PROG Holdings on August 30, 2024 and sell it today you would earn a total of 3,079 from holding PROG Holdings or generate 176.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Emeco Holdings Limited vs. PROG Holdings
Performance |
| Timeline |
| Emeco Holdings |
| PROG Holdings |
Emeco Holdings and PROG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emeco Holdings and PROG Holdings
The main advantage of trading using opposite Emeco Holdings and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeco Holdings position performs unexpectedly, PROG 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 PROG Holdings will offset losses from the drop in PROG Holdings' long position.| Emeco Holdings vs. United Rentals | Emeco Holdings vs. Ashtead Group plc | Emeco Holdings vs. AerCap Holdings NV | Emeco Holdings vs. Fortress Transp Infra |
| PROG Holdings vs. Adtalem Global Education | PROG Holdings vs. Enerpac Tool Group | PROG Holdings vs. Piper Sandler Companies |
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 the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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