Correlation Between ACRES Commercial and PROG Holdings

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

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

Diversification Opportunities for ACRES Commercial and PROG Holdings

-0.05

Correlation Coefficient

ACRES Commercial  PROG Holdings

Good diversification

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

Pair Corralation between ACRES Commercial and PROG Holdings

Assuming the 90 days trading horizon ACRES Commercial is expected to generate 2.81 times less return on investment than PROG Holdings. But when comparing it to its historical volatility, ACRES Commercial Realty is 3.0 times less risky than PROG Holdings. It trades about 0.09 of its potential returns per unit of risk. PROG Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,693  in PROG Holdings on September 17, 2024 and sell it today you would earn a total of  2,720  from holding PROG Holdings or generate 160.66% return on investment over 90 days.

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

ACRES Commercial Realty  vs.  PROG Holdings

ACRES Commercial Realty

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACRES Commercial Realty are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ACRES Commercial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

PROG Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PROG Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PROG Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ACRES Commercial and PROG Holdings

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

The idea behind ACRES Commercial Realty and PROG 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 CEOs Directory module to screen CEOs from public companies around the world.