Correlation Between FlexShopper and PROG Holdings

Can any of the company-specific risk be diversified away by investing in both FlexShopper 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 FlexShopper and PROG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FlexShopper and PROG Holdings, you can compare the effects of market volatilities on FlexShopper 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 FlexShopper with a short position of PROG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and PROG Holdings.

Diversification Opportunities for FlexShopper and PROG Holdings

-0.02

Correlation Coefficient

FlexShopper  PROG Holdings

Good diversification

The 3 months correlation between FlexShopper and PROG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and PROG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROG Holdings and FlexShopper 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 FlexShopper 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 FlexShopper i.e., FlexShopper and PROG Holdings go up and down completely randomly.

Pair Corralation between FlexShopper and PROG Holdings

Given the investment horizon of 90 days FlexShopper is expected to generate 1.79 times more return on investment than PROG Holdings. However, FlexShopper is 1.79 times more volatile than PROG Holdings. It trades about 0.05 of its potential returns per unit of risk. PROG Holdings is currently generating about 0.09 per unit of risk. If you would invest  99.00  in FlexShopper on September 4, 2024 and sell it today you would earn a total of  93.00  from holding FlexShopper or generate 93.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FlexShopper  vs.  PROG Holdings

FlexShopper

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShopper are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, FlexShopper showed solid returns over the last few months and may actually be approaching a breakup point.

PROG Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PROG Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PROG Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FlexShopper and PROG Holdings

The main advantage of trading using opposite FlexShopper and PROG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShopper 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.

The idea behind FlexShopper and PROG Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.