Correlation Between Performant Financial and Maximus
Can any of the company-specific risk be diversified away by investing in both Performant Financial and Maximus 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 Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performant Financial and Maximus, you can compare the effects of market volatilities on Performant Financial and Maximus 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 Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performant Financial and Maximus.
Diversification Opportunities for Performant Financial and Maximus
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Performant and Maximus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Performant Financial and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus 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 Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Performant Financial i.e., Performant Financial and Maximus go up and down completely randomly.
Pair Corralation between Performant Financial and Maximus
Given the investment horizon of 90 days Performant Financial is expected to under-perform the Maximus. In addition to that, Performant Financial is 1.82 times more volatile than Maximus. It trades about -0.18 of its total potential returns per unit of risk. Maximus is currently generating about -0.29 per unit of volatility. If you would invest 8,644 in Maximus on August 28, 2024 and sell it today you would lose (1,298) from holding Maximus or give up 15.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performant Financial vs. Maximus
Performance |
| Timeline |
| Performant Financial |
| Maximus |
Performant Financial and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performant Financial and Maximus
The main advantage of trading using opposite Performant Financial and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performant Financial position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Rentokil Initial PLC | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited |
| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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