Correlation Between Dycom Industries and Global Payments

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Dycom Industries and Global Payments 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 Dycom Industries and Global Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dycom Industries and Global Payments, you can compare the effects of market volatilities on Dycom Industries and Global Payments 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 Dycom Industries with a short position of Global Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dycom Industries and Global Payments.

Diversification Opportunities for Dycom Industries and Global Payments

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dycom and Global is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dycom Industries and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments and Dycom Industries 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 Dycom Industries are associated (or correlated) with Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of Dycom Industries i.e., Dycom Industries and Global Payments go up and down completely randomly.

Pair Corralation between Dycom Industries and Global Payments

Allowing for the 90-day total investment horizon Dycom Industries is expected to generate 1.29 times more return on investment than Global Payments. However, Dycom Industries is 1.29 times more volatile than Global Payments. It trades about 0.08 of its potential returns per unit of risk. Global Payments is currently generating about 0.03 per unit of risk. If you would invest  9,412  in Dycom Industries on August 29, 2024 and sell it today you would earn a total of  8,613  from holding Dycom Industries or generate 91.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dycom Industries  vs.  Global Payments

 Performance 
       Timeline  
Dycom Industries 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Dycom Industries may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Global Payments 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Global Payments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Global Payments may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Dycom Industries and Global Payments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dycom Industries and Global Payments

The main advantage of trading using opposite Dycom Industries and Global Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dycom Industries position performs unexpectedly, Global Payments 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 Global Payments will offset losses from the drop in Global Payments' long position.
The idea behind Dycom Industries and Global Payments 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.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Content Syndication
Quickly integrate customizable finance content to your own investment portal
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Money Managers
Screen money managers from public funds and ETFs managed around the world
Transaction History
View history of all your transactions and understand their impact on performance