Correlation Between PROG Holdings and FlexShopper

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

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

Diversification Opportunities for PROG Holdings and FlexShopper

0.4

Correlation Coefficient

PROG Holdings  FlexShopper

Very weak diversification

The 3 months correlation between PROG and FlexShopper is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper 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 FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of PROG Holdings i.e., PROG Holdings and FlexShopper go up and down completely randomly.

Pair Corralation between PROG Holdings and FlexShopper

Considering the 90-day investment horizon PROG Holdings is expected to under-perform the FlexShopper. But the stock apears to be less risky and, when comparing its historical volatility, PROG Holdings is 1.48 times less risky than FlexShopper. The stock trades about -0.15 of its potential returns per unit of risk. The FlexShopper is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  154.00  in FlexShopper on December 26, 2024 and sell it today you would lose (16.65) from holding FlexShopper or give up 10.81% of portfolio value over 90 days.

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

PROG Holdings  vs.  FlexShopper

PROG Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PROG Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FlexShopper

Risk-Adjusted Performance

Very Weak

Over the last 90 days FlexShopper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, FlexShopper is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PROG Holdings and FlexShopper

The main advantage of trading using opposite PROG Holdings and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROG Holdings position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper's long position.

The idea behind PROG Holdings and FlexShopper 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.