Correlation Between Model N and Ceridian HCM
Can any of the company-specific risk be diversified away by investing in both Model N and Ceridian 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 Model N and Ceridian HCM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Model N and Ceridian HCM Holding, you can compare the effects of market volatilities on Model N and Ceridian 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 Model N with a short position of Ceridian HCM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Model N and Ceridian HCM.
Diversification Opportunities for Model N and Ceridian HCM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Model and Ceridian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Model N and Ceridian HCM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceridian HCM Holding and Model N 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 Model N are associated (or correlated) with Ceridian HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceridian HCM Holding has no effect on the direction of Model N i.e., Model N and Ceridian HCM go up and down completely randomly.
Pair Corralation between Model N and Ceridian HCM
Given the investment horizon of 90 days Model N is expected to under-perform the Ceridian HCM. But the stock apears to be less risky and, when comparing its historical volatility, Model N is 1.07 times less risky than Ceridian HCM. The stock trades about -0.02 of its potential returns per unit of risk. The Ceridian HCM Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,275 in Ceridian HCM Holding on August 27, 2024 and sell it today you would earn a total of 567.00 from holding Ceridian HCM Holding or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 40.41% |
| Values | Daily Returns |
Model N vs. Ceridian HCM Holding
Performance |
| Timeline |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ceridian HCM Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Model N and Ceridian HCM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Model N and Ceridian HCM
The main advantage of trading using opposite Model N and Ceridian HCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Model N position performs unexpectedly, Ceridian 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 Ceridian HCM will offset losses from the drop in Ceridian HCM's long position.The idea behind Model N and Ceridian HCM Holding 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.| Ceridian HCM vs. Paycor HCM | Ceridian HCM vs. Manhattan Associates | Ceridian HCM vs. Paycom Soft | Ceridian HCM vs. Paylocity Holdng |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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