Correlation Between Ricebran Tech and Performant Financial

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

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

Diversification Opportunities for Ricebran Tech and Performant Financial

-0.36

Correlation Coefficient

Ricebran Tech  Performant Financial

Very good diversification

The 3 months correlation between Ricebran and Performant is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ricebran Tech and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial and Ricebran Tech 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 Ricebran Tech 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 Ricebran Tech i.e., Ricebran Tech and Performant Financial go up and down completely randomly.

Pair Corralation between Ricebran Tech and Performant Financial

If you would invest  279.00  in Performant Financial on September 15, 2024 and sell it today you would earn a total of  80.00  from holding Performant Financial or generate 28.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Ricebran Tech  vs.  Performant Financial

Ricebran Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Performant Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ricebran Tech and Performant Financial

The main advantage of trading using opposite Ricebran Tech and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ricebran Tech 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.

The idea behind Ricebran Tech and Performant Financial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.