Correlation Between Performant Healthcare, and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Performant Healthcare, and BK Technologies 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 Healthcare, and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performant Healthcare, and BK Technologies, you can compare the effects of market volatilities on Performant Healthcare, and BK Technologies 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 Healthcare, with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performant Healthcare, and BK Technologies.
Diversification Opportunities for Performant Healthcare, and BK Technologies
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Performant and BKTI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Performant Healthcare, and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and Performant Healthcare, 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 Healthcare, are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Performant Healthcare, i.e., Performant Healthcare, and BK Technologies go up and down completely randomly.
Pair Corralation between Performant Healthcare, and BK Technologies
Given the investment horizon of 90 days Performant Healthcare, is expected to under-perform the BK Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Performant Healthcare, is 1.19 times less risky than BK Technologies. The stock trades about -0.12 of its potential returns per unit of risk. The BK Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,260 in BK Technologies on November 8, 2024 and sell it today you would earn a total of 159.00 from holding BK Technologies or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performant Healthcare, vs. BK Technologies
Performance |
| Timeline |
| Performant Healthcare, |
| BK Technologies |
Performant Healthcare, and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performant Healthcare, and BK Technologies
The main advantage of trading using opposite Performant Healthcare, and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performant Healthcare, position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| Performant Healthcare, vs. The Mosaic | Performant Healthcare, vs. Chemours Co | Performant Healthcare, vs. Cheche Group Class | Performant Healthcare, vs. Integral Ad Science |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Lantronix |
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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