Correlation Between Prog Hldgs and AERGO

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Can any of the company-specific risk be diversified away by investing in both Prog Hldgs and AERGO 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 Hldgs and AERGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prog Hldgs and AERGO, you can compare the effects of market volatilities on Prog Hldgs and AERGO 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 Hldgs with a short position of AERGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prog Hldgs and AERGO.

Diversification Opportunities for Prog Hldgs and AERGO

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Prog Hldgs and AERGO is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Prog Hldgs and AERGO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERGO and Prog Hldgs 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 Hldgs are associated (or correlated) with AERGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERGO has no effect on the direction of Prog Hldgs i.e., Prog Hldgs and AERGO go up and down completely randomly.

Pair Corralation between Prog Hldgs and AERGO

Considering the 90-day investment horizon Prog Hldgs is expected to under-perform the AERGO. But the stock apears to be less risky and, when comparing its historical volatility, Prog Hldgs is 3.51 times less risky than AERGO. The stock trades about -0.33 of its potential returns per unit of risk. The AERGO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12.00  in AERGO on July 4, 2022 and sell it today you would earn a total of  1.00  from holding AERGO or generate 8.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Prog Hldgs  vs.  AERGO

 Performance (%) 
       Timeline  
Prog Hldgs 
Prog Hldgs Performance
0 of 100
Over the last 90 days Prog Hldgs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Prog Hldgs Price Channel

AERGO 
AERGO Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AERGO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, AERGO sustained solid returns over the last few months and may actually be approaching a breakup point.

AERGO Price Channel

Prog Hldgs and AERGO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Prog Hldgs and AERGO

The main advantage of trading using opposite Prog Hldgs and AERGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prog Hldgs position performs unexpectedly, AERGO 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 AERGO will offset losses from the drop in AERGO's long position.
Prog Hldgs vs. Amazon Inc
The idea behind Prog Hldgs and AERGO 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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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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