Correlation Between Pegasystems and Ceridian HCM

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

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

Diversification Opportunities for Pegasystems and Ceridian HCM

0.65

Correlation Coefficient

Pegasystems  Ceridian HCM

Poor diversification

The 3 months correlation between Pegasystems and Ceridian is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pegasystems and Ceridian HCM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceridian HCM Holding and Pegasystems 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 Pegasystems are associated (or correlated) with Ceridian HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceridian HCM Holding has no effect on the direction of Pegasystems i.e., Pegasystems and Ceridian HCM go up and down completely randomly.

Pair Corralation between Pegasystems and Ceridian HCM

If you would invest  5,923  in Pegasystems on September 21, 2024 and sell it today you would earn a total of  3,490  from holding Pegasystems or generate 58.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.79%
Values	Daily Returns

Pegasystems  vs.  Ceridian HCM Holding

Pegasystems

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasystems are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Pegasystems sustained solid returns over the last few months and may actually be approaching a breakup point.

Ceridian HCM Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceridian HCM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ceridian HCM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pegasystems and Ceridian HCM

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

The idea behind Pegasystems and Ceridian HCM Holding 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 Valuation module to check real value of public entities based on technical and fundamental data.