Correlation Between NYSE Composite and Performant Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Performant Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Performant Financial, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Performant Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Performant Financial.
Diversification Opportunities for NYSE Composite and Performant Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Performant is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Performant Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Performant Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than Performant Financial. However, NYSE Composite is 6.73 times less risky than Performant Financial. It trades about 0.18 of its potential returns per unit of risk. Performant Financial is currently generating about -0.17 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 52,921 from holding NYSE Composite or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Performant Financial
Performance |
| Timeline |
NYSE Composite and Performant Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Performant Financial
Pair trading matchups for Performant Financial
Pair Trading with NYSE Composite and Performant Financial
The main advantage of trading using opposite NYSE Composite and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Rentokil Initial PLC | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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