Correlation Between PROG Holdings and Fortress Transportation
Can any of the company-specific risk be diversified away by investing in both PROG Holdings and Fortress Transportation 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 Fortress Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROG Holdings and Fortress Transportation and, you can compare the effects of market volatilities on PROG Holdings and Fortress Transportation 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 Fortress Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROG Holdings and Fortress Transportation.
Diversification Opportunities for PROG Holdings and Fortress Transportation
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PROG and Fortress is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and Fortress Transportation and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transportation 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 Fortress Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transportation has no effect on the direction of PROG Holdings i.e., PROG Holdings and Fortress Transportation go up and down completely randomly.
Pair Corralation between PROG Holdings and Fortress Transportation
Considering the 90-day investment horizon PROG Holdings is expected to generate 3.4 times more return on investment than Fortress Transportation. However, PROG Holdings is 3.4 times more volatile than Fortress Transportation and. It trades about 0.21 of its potential returns per unit of risk. Fortress Transportation and is currently generating about 0.05 per unit of risk. 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 |
PROG Holdings vs. Fortress Transportation and
Performance |
| Timeline |
| PROG Holdings |
| Fortress Transportation |
PROG Holdings and Fortress Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROG Holdings and Fortress Transportation
The main advantage of trading using opposite PROG Holdings and Fortress Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROG Holdings position performs unexpectedly, Fortress Transportation 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 Fortress Transportation will offset losses from the drop in Fortress Transportation's long position.| PROG Holdings vs. Adtalem Global Education | PROG Holdings vs. Enerpac Tool Group | PROG Holdings vs. Piper Sandler Companies |
| Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. SiriusPoint | Fortress Transportation vs. New York Mortgage | Fortress Transportation vs. Compass Diversified |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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