Correlation Between SSC Technologies and Paycor HCM

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

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

Diversification Opportunities for SSC Technologies and Paycor HCM

0.65

Correlation Coefficient

SSC Technologies  Paycor HCM

Poor diversification

The 3 months correlation between SSC and Paycor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and Paycor HCM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycor HCM and SSC Technologies 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 SSC Technologies Holdings 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 SSC Technologies i.e., SSC Technologies and Paycor HCM go up and down completely randomly.

Pair Corralation between SSC Technologies and Paycor HCM

Given the investment horizon of 90 days SSC Technologies is expected to generate 1.64 times less return on investment than Paycor HCM. But when comparing it to its historical volatility, SSC Technologies Holdings is 2.62 times less risky than Paycor HCM. It trades about 0.19 of its potential returns per unit of risk. Paycor HCM is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,806  in Paycor HCM on November 29, 2024 and sell it today you would earn a total of  409.00  from holding Paycor HCM or generate 22.65% return on investment over 90 days.

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

SSC Technologies Holdings  vs.  Paycor HCM

SSC Technologies Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SSC Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Paycor HCM

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Paycor HCM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and Paycor HCM

The main advantage of trading using opposite SSC Technologies and Paycor HCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies 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 SSC Technologies Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.