Correlation Between Performant Healthcare, and Skechers USA

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

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

Diversification Opportunities for Performant Healthcare, and Skechers USA

-0.62

Correlation Coefficient

Performant Healthcare,  Skechers USA

Excellent diversification

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

Pair Corralation between Performant Healthcare, and Skechers USA

Given the investment horizon of 90 days Performant Healthcare, is expected to under-perform the Skechers USA. In addition to that, Performant Healthcare, is 2.36 times more volatile than Skechers USA. It trades about -0.3 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.28 per unit of volatility. If you would invest  6,773  in Skechers USA on October 25, 2024 and sell it today you would earn a total of  573.00  from holding Skechers USA or generate 8.46% return on investment over 90 days.

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

Performant Healthcare,  vs.  Skechers USA

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.

Skechers USA

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Skechers USA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Skechers USA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performant Healthcare, and Skechers USA

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

The idea behind Performant Healthcare, and Skechers USA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.