Correlation Between Fortress Transportation and PROG Holdings
Can any of the company-specific risk be diversified away by investing in both Fortress Transportation 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 Fortress Transportation and PROG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transportation and and PROG Holdings, you can compare the effects of market volatilities on Fortress Transportation 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 Fortress Transportation with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transportation and PROG Holdings.
Diversification Opportunities for Fortress Transportation and PROG Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fortress and PROG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transportation and and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and Fortress Transportation 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 Fortress Transportation and 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 Fortress Transportation i.e., Fortress Transportation and PROG Holdings go up and down completely randomly.
Pair Corralation between Fortress Transportation and PROG Holdings
Assuming the 90 days horizon Fortress Transportation is expected to generate 14.39 times less return on investment than PROG Holdings. But when comparing it to its historical volatility, Fortress Transportation and is 3.4 times less risky than PROG Holdings. It trades about 0.05 of its potential returns per unit of risk. PROG Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,313 in PROG Holdings on August 30, 2024 and sell it today you would earn a total of 508.00 from holding PROG Holdings or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fortress Transportation and vs. PROG Holdings
Performance |
| Timeline |
| Fortress Transportation |
| PROG Holdings |
Fortress Transportation and PROG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transportation and PROG Holdings
The main advantage of trading using opposite Fortress Transportation and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transportation 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.| Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. SiriusPoint | Fortress Transportation vs. New York Mortgage | Fortress Transportation vs. Compass Diversified |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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