Correlation Between Ryder System and Performant Financial

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

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

Diversification Opportunities for Ryder System and Performant Financial

-0.39

Correlation Coefficient

Ryder System  Performant Financial

Very good diversification

The 3 months correlation between Ryder and Performant is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ryder System and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial and Ryder System 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 Ryder System 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 Ryder System i.e., Ryder System and Performant Financial go up and down completely randomly.

Pair Corralation between Ryder System and Performant Financial

Taking into account the 90-day investment horizon Ryder System is expected to generate 0.59 times more return on investment than Performant Financial. However, Ryder System is 1.69 times less risky than Performant Financial. It trades about 0.15 of its potential returns per unit of risk. Performant Financial is currently generating about -0.05 per unit of risk. If you would invest  14,057  in Ryder System on August 25, 2024 and sell it today you would earn a total of  2,510  from holding Ryder System or generate 17.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Ryder System  vs.  Performant Financial

Ryder System

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryder System are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ryder System reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ryder System and Performant Financial

The main advantage of trading using opposite Ryder System and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryder System 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 Ryder System 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.