Correlation Between Performant Financial and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Performant Financial and Acco Brands 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 Performant Financial and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performant Financial and Acco Brands, you can compare the effects of market volatilities on Performant Financial and Acco Brands 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 Performant Financial with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performant Financial and Acco Brands.
Diversification Opportunities for Performant Financial and Acco Brands
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Performant and Acco is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Performant Financial and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Performant Financial 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 Performant Financial are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Performant Financial i.e., Performant Financial and Acco Brands go up and down completely randomly.
Pair Corralation between Performant Financial and Acco Brands
Given the investment horizon of 90 days Performant Financial is expected to under-perform the Acco Brands. In addition to that, Performant Financial is 1.59 times more volatile than Acco Brands. It trades about -0.18 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.34 per unit of volatility. If you would invest 488.00 in Acco Brands on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Acco Brands or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performant Financial vs. Acco Brands
Performance |
| Timeline |
| Performant Financial |
| Acco Brands |
Performant Financial and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performant Financial and Acco Brands
The main advantage of trading using opposite Performant Financial and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performant Financial position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Rentokil Initial PLC | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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