Correlation Between Team and Paycor HCM

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

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

Diversification Opportunities for Team and Paycor HCM

-0.82

Correlation Coefficient

Team  Paycor HCM

Pay attention - limited upside

The 3 months correlation between Team and Paycor is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Team Inc and Paycor HCM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycor HCM and Team 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 Team Inc 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 Team i.e., Team and Paycor HCM go up and down completely randomly.

Pair Corralation between Team and Paycor HCM

Given the investment horizon of 90 days Team Inc is expected to generate 2.29 times more return on investment than Paycor HCM. However, Team is 2.29 times more volatile than Paycor HCM. It trades about 0.11 of its potential returns per unit of risk. Paycor HCM is currently generating about 0.12 per unit of risk. If you would invest  672.00  in Team Inc on October 9, 2024 and sell it today you would earn a total of  874.00  from holding Team Inc or generate 130.06% return on investment over 90 days.

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

Team Inc  vs.  Paycor HCM

Team Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Team Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Paycor HCM

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 20 (%) 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 Team and Paycor HCM

The main advantage of trading using opposite Team and Paycor HCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team 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 Team Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.