Correlation Between SVB Financial and Paycom Software

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

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

Diversification Opportunities for SVB Financial and Paycom Software

0.0

Correlation Coefficient

SVB Financial  Paycom Software

Pay attention - limited upside

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

Pair Corralation between SVB Financial and Paycom Software

If you would invest  4,676  in Paycom Software on December 4, 2024 and sell it today you would lose (461.00) from holding Paycom Software or give up 9.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	39.63%
Values	Daily Returns

SVB Financial Group  vs.  Paycom Software

SVB Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SVB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, SVB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Paycom Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paycom Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SVB Financial and Paycom Software

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

The idea behind SVB Financial Group and Paycom Software 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.