Correlation Between PROG Holdings and Air Lease
Can any of the company-specific risk be diversified away by investing in both PROG Holdings and Air Lease 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 PROG Holdings and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROG Holdings and Air Lease, you can compare the effects of market volatilities on PROG Holdings and Air Lease 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 PROG Holdings with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROG Holdings and Air Lease.
Diversification Opportunities for PROG Holdings and Air Lease
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PROG and Air is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and PROG 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 PROG Holdings are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of PROG Holdings i.e., PROG Holdings and Air Lease go up and down completely randomly.
Pair Corralation between PROG Holdings and Air Lease
Considering the 90-day investment horizon PROG Holdings is expected to generate 1.53 times less return on investment than Air Lease. In addition to that, PROG Holdings is 1.39 times more volatile than Air Lease. It trades about 0.17 of its total potential returns per unit of risk. Air Lease is currently generating about 0.36 per unit of volatility. If you would invest 4,437 in Air Lease on September 4, 2024 and sell it today you would earn a total of 623.00 from holding Air Lease or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROG Holdings vs. Air Lease
Performance |
| Timeline |
| PROG Holdings |
| Air Lease |
PROG Holdings and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROG Holdings and Air Lease
The main advantage of trading using opposite PROG Holdings and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROG Holdings position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| PROG Holdings vs. Adtalem Global Education | PROG Holdings vs. Enerpac Tool Group | PROG Holdings vs. Piper Sandler Companies |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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