Correlation Between Hudson Global and Paycor HCM

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

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

Diversification Opportunities for Hudson Global and Paycor HCM

-0.63

Correlation Coefficient

Hudson Global  Paycor HCM

Excellent diversification

The 3 months correlation between Hudson and Paycor is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Global and Paycor HCM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycor HCM and Hudson Global 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 Hudson Global 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 Hudson Global i.e., Hudson Global and Paycor HCM go up and down completely randomly.

Pair Corralation between Hudson Global and Paycor HCM

Given the investment horizon of 90 days Hudson Global is expected to generate 28.03 times more return on investment than Paycor HCM. However, Hudson Global is 28.03 times more volatile than Paycor HCM. It trades about 0.06 of its potential returns per unit of risk. Paycor HCM is currently generating about -0.01 per unit of risk. If you would invest  1,578  in Hudson Global on September 25, 2024 and sell it today you would lose (158.00) from holding Hudson Global or give up 10.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Hudson Global  vs.  Paycor HCM

Hudson Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Paycor HCM

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental indicators, Paycor HCM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hudson Global and Paycor HCM

The main advantage of trading using opposite Hudson Global and Paycor HCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Global 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 Hudson Global 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.