Correlation Between Performant Financial and Interface
Can any of the company-specific risk be diversified away by investing in both Performant Financial and Interface 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 Interface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performant Financial and Interface, you can compare the effects of market volatilities on Performant Financial and Interface 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 Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performant Financial and Interface.
Diversification Opportunities for Performant Financial and Interface
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Performant and Interface is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Performant Financial and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface 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 Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Performant Financial i.e., Performant Financial and Interface go up and down completely randomly.
Pair Corralation between Performant Financial and Interface
Given the investment horizon of 90 days Performant Financial is expected to under-perform the Interface. But the stock apears to be less risky and, when comparing its historical volatility, Performant Financial is 1.49 times less risky than Interface. The stock trades about -0.19 of its potential returns per unit of risk. The Interface is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,782 in Interface on August 30, 2024 and sell it today you would earn a total of 870.00 from holding Interface or generate 48.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Performant Financial vs. Interface
Performance |
| Timeline |
| Performant Financial |
| Interface |
Performant Financial and Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performant Financial and Interface
The main advantage of trading using opposite Performant Financial and Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performant Financial position performs unexpectedly, Interface 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 Interface will offset losses from the drop in Interface'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 |
| Interface vs. Quanex Building Products | Interface vs. Janus International Group | Interface vs. Apogee Enterprises | Interface vs. Gibraltar Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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