Correlation Between BorgWarner and Performant Healthcare,

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

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

Diversification Opportunities for BorgWarner and Performant Healthcare,

0.42

Correlation Coefficient

BorgWarner  Performant Healthcare,

Very weak diversification

The 3 months correlation between BorgWarner and Performant is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Performant Healthcare, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Healthcare, and BorgWarner 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 BorgWarner are associated (or correlated) with Performant Healthcare,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performant Healthcare, has no effect on the direction of BorgWarner i.e., BorgWarner and Performant Healthcare, go up and down completely randomly.

Pair Corralation between BorgWarner and Performant Healthcare,

Considering the 90-day investment horizon BorgWarner is expected to generate 0.41 times more return on investment than Performant Healthcare,. However, BorgWarner is 2.42 times less risky than Performant Healthcare,. It trades about -0.04 of its potential returns per unit of risk. Performant Healthcare, is currently generating about -0.17 per unit of risk. If you would invest  3,430  in BorgWarner on October 26, 2024 and sell it today you would lose (166.00) from holding BorgWarner or give up 4.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BorgWarner  vs.  Performant Healthcare,

BorgWarner

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BorgWarner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BorgWarner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Performant Healthcare,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performant Healthcare, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BorgWarner and Performant Healthcare,

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

The idea behind BorgWarner and Performant Healthcare, 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.