Correlation Between GATX and PROG Holdings
Can any of the company-specific risk be diversified away by investing in both GATX 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 GATX and PROG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GATX Corporation and PROG Holdings, you can compare the effects of market volatilities on GATX 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 GATX with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and PROG Holdings.
Diversification Opportunities for GATX and PROG Holdings
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GATX and PROG is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and GATX 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 GATX Corporation 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 GATX i.e., GATX and PROG Holdings go up and down completely randomly.
Pair Corralation between GATX and PROG Holdings
Given the investment horizon of 90 days GATX is expected to generate 1.92 times less return on investment than PROG Holdings. But when comparing it to its historical volatility, GATX Corporation is 1.85 times less risky than PROG Holdings. It trades about 0.07 of its potential returns per unit of risk. PROG Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,350 in PROG Holdings on August 27, 2024 and sell it today you would earn a total of 2,393 from holding PROG Holdings or generate 101.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GATX Corp. vs. PROG Holdings
Performance |
| Timeline |
| GATX |
| PROG Holdings |
GATX and PROG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GATX and PROG Holdings
The main advantage of trading using opposite GATX and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX 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.| GATX vs. Custom Truck One | GATX vs. HE Equipment Services | GATX vs. Alta Equipment Group | GATX vs. McGrath RentCorp |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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