Correlation Between Performant Financial and CBIZ

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

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

Diversification Opportunities for Performant Financial and CBIZ

-0.62

Correlation Coefficient

Performant Financial  CBIZ

Excellent diversification

The 3 months correlation between Performant and CBIZ is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Performant Financial and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and Performant Financial 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 Financial are associated (or correlated) with CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of Performant Financial i.e., Performant Financial and CBIZ go up and down completely randomly.

Pair Corralation between Performant Financial and CBIZ

Given the investment horizon of 90 days Performant Financial is expected to generate 1.86 times more return on investment than CBIZ. However, Performant Financial is 1.86 times more volatile than CBIZ Inc. It trades about 0.25 of its potential returns per unit of risk. CBIZ Inc is currently generating about -0.02 per unit of risk. If you would invest  316.00  in Performant Financial on September 24, 2024 and sell it today you would earn a total of  40.00  from holding Performant Financial or generate 12.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.95%
Values	Daily Returns

Performant Financial  vs.  CBIZ Inc

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.

CBIZ Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performant Financial and CBIZ

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

The idea behind Performant Financial and CBIZ Inc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.