Correlation Between Paycom Soft and LT

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

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

Diversification Opportunities for Paycom Soft and LT

0.0

Correlation Coefficient

Paycom Soft  LT

Pay attention - limited upside

The 3 months correlation between Paycom and LT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Paycom Soft and LT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Group and Paycom Soft 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 Paycom Soft are associated (or correlated) with LT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Group has no effect on the direction of Paycom Soft i.e., Paycom Soft and LT go up and down completely randomly.

Pair Corralation between Paycom Soft and LT

If you would invest  20,408  in Paycom Soft on December 28, 2024 and sell it today you would earn a total of  2,174  from holding Paycom Soft or generate 10.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Paycom Soft  vs.  LT Group

Paycom Soft

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paycom Soft are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Paycom Soft may actually be approaching a critical reversion point that can send shares even higher in April 2025.

LT Group

Risk-Adjusted Performance

Solid

Over the last 90 days LT Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Paycom Soft and LT

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

The idea behind Paycom Soft and LT Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.