Correlation Between Rentokil Initial and Performant Financial
Can any of the company-specific risk be diversified away by investing in both Rentokil Initial and Performant Financial 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 Rentokil Initial and Performant Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rentokil Initial PLC and Performant Financial, you can compare the effects of market volatilities on Rentokil Initial and Performant Financial 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 Rentokil Initial with a short position of Performant Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rentokil Initial and Performant Financial.
Diversification Opportunities for Rentokil Initial and Performant Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rentokil and Performant is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rentokil Initial PLC and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial and Rentokil Initial 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 Rentokil Initial PLC are associated (or correlated) with Performant Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performant Financial has no effect on the direction of Rentokil Initial i.e., Rentokil Initial and Performant Financial go up and down completely randomly.
Pair Corralation between Rentokil Initial and Performant Financial
Considering the 90-day investment horizon Rentokil Initial PLC is expected to generate 0.32 times more return on investment than Performant Financial. However, Rentokil Initial PLC is 3.14 times less risky than Performant Financial. It trades about 0.14 of its potential returns per unit of risk. Performant Financial is currently generating about -0.17 per unit of risk. If you would invest 2,481 in Rentokil Initial PLC on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Rentokil Initial PLC or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rentokil Initial PLC vs. Performant Financial
Performance |
| Timeline |
| Rentokil Initial PLC |
| Performant Financial |
Rentokil Initial and Performant Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rentokil Initial and Performant Financial
The main advantage of trading using opposite Rentokil Initial and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rentokil Initial position performs unexpectedly, Performant Financial 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 Performant Financial will offset losses from the drop in Performant Financial's long position.| Rentokil Initial vs. First Advantage Corp | Rentokil Initial vs. Civeo Corp | Rentokil Initial vs. Performant Financial | Rentokil Initial vs. Network 1 Technologies |
| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Rentokil Initial PLC | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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