Correlation Between PROG Holdings and Herc Holdings
Can any of the company-specific risk be diversified away by investing in both PROG Holdings and Herc 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 PROG Holdings and Herc Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROG Holdings and Herc Holdings, you can compare the effects of market volatilities on PROG Holdings and Herc 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 PROG Holdings with a short position of Herc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROG Holdings and Herc Holdings.
Diversification Opportunities for PROG Holdings and Herc Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between PROG and Herc is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc Holdings 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 Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of PROG Holdings i.e., PROG Holdings and Herc Holdings go up and down completely randomly.
Pair Corralation between PROG Holdings and Herc Holdings
Considering the 90-day investment horizon PROG Holdings is expected to generate 0.83 times more return on investment than Herc Holdings. However, PROG Holdings is 1.21 times less risky than Herc Holdings. It trades about 0.18 of its potential returns per unit of risk. Herc Holdings is currently generating about 0.07 per unit of risk. If you would invest 4,235 in PROG Holdings on August 24, 2024 and sell it today you would earn a total of 399.00 from holding PROG Holdings or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROG Holdings vs. Herc Holdings
Performance |
| Timeline |
| PROG Holdings |
| Herc Holdings |
PROG Holdings and Herc Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROG Holdings and Herc Holdings
The main advantage of trading using opposite PROG Holdings and Herc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROG Holdings position performs unexpectedly, Herc 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 Herc Holdings will offset losses from the drop in Herc Holdings' long position.| PROG Holdings vs. Adtalem Global Education | PROG Holdings vs. Enerpac Tool Group | PROG Holdings vs. Piper Sandler Companies |
| Herc Holdings vs. HE Equipment Services | Herc Holdings vs. Air Lease | Herc Holdings vs. Aquagold International | Herc Holdings vs. Small Cap Core |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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