Correlation Between Performant Financial and Copart
Can any of the company-specific risk be diversified away by investing in both Performant Financial and Copart 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 Copart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performant Financial and Copart Inc, you can compare the effects of market volatilities on Performant Financial and Copart 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 Copart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performant Financial and Copart.
Diversification Opportunities for Performant Financial and Copart
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Performant and Copart is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Performant Financial and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc 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 Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Performant Financial i.e., Performant Financial and Copart go up and down completely randomly.
Pair Corralation between Performant Financial and Copart
Given the investment horizon of 90 days Performant Financial is expected to under-perform the Copart. In addition to that, Performant Financial is 1.84 times more volatile than Copart Inc. It trades about -0.19 of its total potential returns per unit of risk. Copart Inc is currently generating about 0.36 per unit of volatility. If you would invest 5,218 in Copart Inc on August 30, 2024 and sell it today you would earn a total of 1,133 from holding Copart Inc or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performant Financial vs. Copart Inc
Performance |
| Timeline |
| Performant Financial |
| Copart Inc |
Performant Financial and Copart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performant Financial and Copart
The main advantage of trading using opposite Performant Financial and Copart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performant Financial position performs unexpectedly, Copart 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 Copart will offset losses from the drop in Copart's long position.| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Rentokil Initial PLC | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited |
| Copart vs. Global Payments | Copart vs. ABM Industries Incorporated | Copart vs. Thomson Reuters Corp | Copart vs. Aramark Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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