Correlation Between PROG Holdings and Multi Ways

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

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

Diversification Opportunities for PROG Holdings and Multi Ways

0.05

Correlation Coefficient

PROG Holdings  Multi Ways

Significant diversification

The 3 months correlation between PROG and Multi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways 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 Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of PROG Holdings i.e., PROG Holdings and Multi Ways go up and down completely randomly.

Pair Corralation between PROG Holdings and Multi Ways

Considering the 90-day investment horizon PROG Holdings is expected to generate 0.32 times more return on investment than Multi Ways. However, PROG Holdings is 3.12 times less risky than Multi Ways. It trades about 0.09 of its potential returns per unit of risk. Multi Ways Holdings is currently generating about -0.02 per unit of risk. If you would invest  3,675  in PROG Holdings on September 3, 2024 and sell it today you would earn a total of  1,191  from holding PROG Holdings or generate 32.41% return on investment over 90 days.

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

PROG Holdings  vs.  Multi Ways Holdings

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 unfluctuating basic indicators, PROG Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Multi Ways Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PROG Holdings and Multi Ways

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

The idea behind PROG Holdings and Multi Ways 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.