Correlation Between Alphabet and Performant Financial
Can any of the company-specific risk be diversified away by investing in both Alphabet and Performant Financial 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 Alphabet and Performant Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Performant Financial, you can compare the effects of market volatilities on Alphabet and Performant Financial 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 Alphabet with a short position of Performant Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Performant Financial.
Diversification Opportunities for Alphabet and Performant Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alphabet and Performant is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Performant Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performant Financial has no effect on the direction of Alphabet i.e., Alphabet and Performant Financial go up and down completely randomly.
Pair Corralation between Alphabet and Performant Financial
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.4 times more return on investment than Performant Financial. However, Alphabet Inc Class C is 2.52 times less risky than Performant Financial. It trades about -0.07 of its potential returns per unit of risk. Performant Financial is currently generating about -0.18 per unit of risk. If you would invest 17,614 in Alphabet Inc Class C on August 31, 2024 and sell it today you would lose (532.00) from holding Alphabet Inc Class C or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Performant Financial
Performance |
| Timeline |
| Alphabet Class C |
| Performant Financial |
Alphabet and Performant Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Performant Financial
The main advantage of trading using opposite Alphabet and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Performant Financial 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 Performant Financial will offset losses from the drop in Performant Financial's long position.The idea behind Alphabet Inc Class C and Performant Financial 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.| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited | Performant Financial vs. First Advantage Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |