Correlation Between 2G ENERGY and Paychex
Can any of the company-specific risk be diversified away by investing in both 2G ENERGY and Paychex 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 2G ENERGY and Paychex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2G ENERGY and Paychex, you can compare the effects of market volatilities on 2G ENERGY and Paychex 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 2G ENERGY with a short position of Paychex. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2G ENERGY and Paychex.
Diversification Opportunities for 2G ENERGY and Paychex
Very weak diversification
The 3 months correlation between 2GB and Paychex is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding 2G ENERGY and Paychex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paychex and 2G ENERGY 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 2G ENERGY are associated (or correlated) with Paychex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paychex has no effect on the direction of 2G ENERGY i.e., 2G ENERGY and Paychex go up and down completely randomly.
Pair Corralation between 2G ENERGY and Paychex
Assuming the 90 days trading horizon 2G ENERGY is expected to generate 17.26 times less return on investment than Paychex. In addition to that, 2G ENERGY is 1.83 times more volatile than Paychex. It trades about 0.01 of its total potential returns per unit of risk. Paychex is currently generating about 0.22 per unit of volatility. If you would invest 12,848 in Paychex on August 30, 2024 and sell it today you would earn a total of 1,022 from holding Paychex or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
2G ENERGY vs. Paychex
Performance |
| Timeline |
| 2G ENERGY |
| Paychex |
2G ENERGY and Paychex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2G ENERGY and Paychex
The main advantage of trading using opposite 2G ENERGY and Paychex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2G ENERGY position performs unexpectedly, Paychex 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 Paychex will offset losses from the drop in Paychex's long position.| 2G ENERGY vs. Apple Inc | 2G ENERGY vs. Apple Inc | 2G ENERGY vs. Superior Plus Corp | 2G ENERGY vs. SIVERS SEMICONDUCTORS AB |
| Paychex vs. Superior Plus Corp | Paychex vs. SIVERS SEMICONDUCTORS AB | Paychex vs. Talanx AG | Paychex vs. 2G ENERGY |
Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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