Correlation Between Hertz Global and PROG Holdings
Can any of the company-specific risk be diversified away by investing in both Hertz Global 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 Hertz Global and PROG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Hldgs and PROG Holdings, you can compare the effects of market volatilities on Hertz Global 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 Hertz Global with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and PROG Holdings.
Diversification Opportunities for Hertz Global and PROG Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hertz and PROG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and Hertz Global 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 Hertz Global Hldgs 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 Hertz Global i.e., Hertz Global and PROG Holdings go up and down completely randomly.
Pair Corralation between Hertz Global and PROG Holdings
Assuming the 90 days horizon Hertz Global Hldgs is expected to under-perform the PROG Holdings. In addition to that, Hertz Global is 1.58 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 0.1 per unit of volatility. If you would invest 2,693 in PROG Holdings on August 26, 2024 and sell it today you would earn a total of 2,050 from holding PROG Holdings or generate 76.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Hldgs vs. PROG Holdings
Performance |
| Timeline |
| Hertz Global Hldgs |
| PROG Holdings |
Hertz Global and PROG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and PROG Holdings
The main advantage of trading using opposite Hertz Global and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global 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.| Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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