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

0.27

Correlation Coefficient

PROG Holdings  Fortress Transportation

Modest diversification

The 3 months correlation between PROG and Fortress is 0.27. 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 2.53 times more return on investment than Fortress Transportation. However, PROG Holdings is 2.53 times more volatile than Fortress Transportation and. It trades about 0.09 of its potential returns per unit of risk. Fortress Transportation and is currently generating about 0.09 per unit of risk. If you would invest  1,691  in PROG Holdings on September 12, 2024 and sell it today you would earn a total of  3,119  from holding PROG Holdings or generate 184.45% 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.  Fortress Transportation and

PROG Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PROG Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, PROG Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fortress Transportation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transportation and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Fortress Transportation is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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.

The idea behind PROG Holdings and Fortress Transportation and 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.