Correlation Between PROG Holdings and Ryder System

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

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

Diversification Opportunities for PROG Holdings and Ryder System

0.56

Correlation Coefficient

PROG Holdings  Ryder System

Very weak diversification

The 3 months correlation between PROG and Ryder is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings and Ryder System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryder System 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 Ryder System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryder System has no effect on the direction of PROG Holdings i.e., PROG Holdings and Ryder System go up and down completely randomly.

Pair Corralation between PROG Holdings and Ryder System

Considering the 90-day investment horizon PROG Holdings is expected to under-perform the Ryder System. In addition to that, PROG Holdings is 2.34 times more volatile than Ryder System. It trades about -0.15 of its total potential returns per unit of risk. Ryder System is currently generating about -0.08 per unit of volatility. If you would invest  15,919  in Ryder System on December 26, 2024 and sell it today you would lose (1,432) from holding Ryder System or give up 9.0% 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.  Ryder System

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.

Ryder System

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryder System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with PROG Holdings and Ryder System

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

The idea behind PROG Holdings and Ryder System 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.