Correlation Between Herc Holdings and PROG Holdings
Can any of the company-specific risk be diversified away by investing in both Herc 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 Herc 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 Herc Holdings and PROG Holdings, you can compare the effects of market volatilities on Herc 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 Herc Holdings with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and PROG Holdings.
Diversification Opportunities for Herc Holdings and PROG Holdings
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herc and PROG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and Herc 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 Herc Holdings 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 Herc Holdings i.e., Herc Holdings and PROG Holdings go up and down completely randomly.
Pair Corralation between Herc Holdings and PROG Holdings
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.53 times less return on investment than PROG Holdings. In addition to that, Herc Holdings is 1.05 times more volatile than PROG Holdings. It trades about 0.04 of its total potential returns per unit of risk. PROG Holdings is currently generating about 0.07 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herc Holdings vs. PROG Holdings
Performance |
| Timeline |
| Herc Holdings |
| PROG Holdings |
Herc Holdings and PROG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and PROG Holdings
The main advantage of trading using opposite Herc Holdings and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc 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.| Herc Holdings vs. PROG Holdings | Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Mega Matrix Corp | Herc Holdings vs. FTAI Aviation Ltd |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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