Correlation Between Jefferies Financial and Paycom Software
Can any of the company-specific risk be diversified away by investing in both Jefferies 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 Jefferies 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 Jefferies Financial Group and Paycom Software, you can compare the effects of market volatilities on Jefferies 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 Jefferies Financial with a short position of Paycom Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Paycom Software.
Diversification Opportunities for Jefferies Financial and Paycom Software
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jefferies and Paycom is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies 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 Jefferies 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 Jefferies 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 Jefferies Financial i.e., Jefferies Financial and Paycom Software go up and down completely randomly.
Pair Corralation between Jefferies Financial and Paycom Software
Assuming the 90 days trading horizon Jefferies Financial Group is expected to generate 0.78 times more return on investment than Paycom Software. However, Jefferies Financial Group is 1.29 times less risky than Paycom Software. It trades about 0.03 of its potential returns per unit of risk. Paycom Software is currently generating about -0.23 per unit of risk. If you would invest 47,619 in Jefferies Financial Group on October 11, 2024 and sell it today you would earn a total of 339.00 from holding Jefferies Financial Group or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Paycom Software
Performance |
| Timeline |
| Jefferies Financial |
| Paycom Software |
Jefferies Financial and Paycom Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Paycom Software
The main advantage of trading using opposite Jefferies Financial and Paycom Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies 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.| Jefferies Financial vs. Energisa SA | Jefferies Financial vs. BTG Pactual Logstica | Jefferies Financial vs. Plano Plano Desenvolvimento | Jefferies Financial vs. Ares Management |
| Paycom Software vs. ICICI Bank Limited | Paycom Software vs. JB Hunt Transport | Paycom Software vs. Bank of America | Paycom Software vs. Jefferies Financial Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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