Correlation Between Data Storage and Perficient

Can any of the company-specific risk be diversified away by investing in both Data Storage and Perficient 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 Data Storage and Perficient into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data Storage Corp and Perficient, you can compare the effects of market volatilities on Data Storage and Perficient 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 Data Storage with a short position of Perficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Storage and Perficient.

Diversification Opportunities for Data Storage and Perficient

0.43

Correlation Coefficient

Data Storage  Perficient

Very weak diversification

The 3 months correlation between Data and Perficient is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Data Storage Corp and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient and Data Storage 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 Data Storage Corp are associated (or correlated) with Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of Data Storage i.e., Data Storage and Perficient go up and down completely randomly.

Pair Corralation between Data Storage and Perficient

Given the investment horizon of 90 days Data Storage Corp is expected to generate 27.21 times more return on investment than Perficient. However, Data Storage is 27.21 times more volatile than Perficient. It trades about 0.06 of its potential returns per unit of risk. Perficient is currently generating about 0.25 per unit of risk. If you would invest  357.00  in Data Storage Corp on September 1, 2024 and sell it today you would earn a total of  35.00  from holding Data Storage Corp or generate 9.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	34.92%
Values	Daily Returns

Data Storage Corp  vs.  Perficient

Data Storage Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Data Storage Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Data Storage unveiled solid returns over the last few months and may actually be approaching a breakup point.

Perficient

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Perficient is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Data Storage and Perficient

The main advantage of trading using opposite Data Storage and Perficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Storage position performs unexpectedly, Perficient 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 Perficient will offset losses from the drop in Perficient's long position.

The idea behind Data Storage Corp and Perficient pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.