Correlation Between Dorel Industries and Dayforce

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

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

Diversification Opportunities for Dorel Industries and Dayforce

-0.71

Correlation Coefficient

Dorel Industries  Dayforce

Pay attention - limited upside

The 3 months correlation between Dorel and Dayforce is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dorel Industries and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce and Dorel Industries 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 Dorel Industries are associated (or correlated) with Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of Dorel Industries i.e., Dorel Industries and Dayforce go up and down completely randomly.

Pair Corralation between Dorel Industries and Dayforce

Assuming the 90 days trading horizon Dorel Industries is expected to under-perform the Dayforce. In addition to that, Dorel Industries is 1.27 times more volatile than Dayforce. It trades about -0.01 of its total potential returns per unit of risk. Dayforce is currently generating about 0.03 per unit of volatility. If you would invest  8,962  in Dayforce on October 4, 2024 and sell it today you would earn a total of  1,472  from holding Dayforce or generate 16.42% return on investment over 90 days.

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

Dorel Industries  vs.  Dayforce

Dorel Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dorel Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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.

Dayforce

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dayforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dorel Industries and Dayforce

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

The idea behind Dorel Industries and Dayforce 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.