Correlation Between Blackbaud and Paycor HCM

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

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

Diversification Opportunities for Blackbaud and Paycor HCM

0.15

Correlation Coefficient

Blackbaud  Paycor HCM

Average diversification

The 3 months correlation between Blackbaud and Paycor is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Paycor HCM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycor HCM and Blackbaud 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 Blackbaud are associated (or correlated) with Paycor HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paycor HCM has no effect on the direction of Blackbaud i.e., Blackbaud and Paycor HCM go up and down completely randomly.

Pair Corralation between Blackbaud and Paycor HCM

Given the investment horizon of 90 days Blackbaud is expected to generate 5.72 times less return on investment than Paycor HCM. In addition to that, Blackbaud is 1.3 times more volatile than Paycor HCM. It trades about 0.03 of its total potential returns per unit of risk. Paycor HCM is currently generating about 0.21 per unit of volatility. If you would invest  1,404  in Paycor HCM on September 2, 2024 and sell it today you would earn a total of  402.00  from holding Paycor HCM or generate 28.63% return on investment over 90 days.

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

Blackbaud  vs.  Paycor HCM

Blackbaud

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Paycor HCM

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Paycor HCM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackbaud and Paycor HCM

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

The idea behind Blackbaud and Paycor HCM 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.