Correlation Between Paycom Soft and Global Lighting
Can any of the company-specific risk be diversified away by investing in both Paycom Soft and Global Lighting 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 Paycom Soft and Global Lighting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paycom Soft and Global Lighting Technologies, you can compare the effects of market volatilities on Paycom Soft and Global Lighting 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 Paycom Soft with a short position of Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paycom Soft and Global Lighting.
Diversification Opportunities for Paycom Soft and Global Lighting
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Paycom and Global is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Paycom Soft and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech and Paycom Soft 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 Paycom Soft are associated (or correlated) with Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of Paycom Soft i.e., Paycom Soft and Global Lighting go up and down completely randomly.
Pair Corralation between Paycom Soft and Global Lighting
Given the investment horizon of 90 days Paycom Soft is expected to under-perform the Global Lighting. In addition to that, Paycom Soft is 1.67 times more volatile than Global Lighting Technologies. It trades about -0.01 of its total potential returns per unit of risk. Global Lighting Technologies is currently generating about 0.02 per unit of volatility. If you would invest 5,810 in Global Lighting Technologies on September 4, 2024 and sell it today you would earn a total of 350.00 from holding Global Lighting Technologies or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Paycom Soft vs. Global Lighting Technologies
Performance |
| Timeline |
| Paycom Soft |
| Global Lighting Tech |
Paycom Soft and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paycom Soft and Global Lighting
The main advantage of trading using opposite Paycom Soft and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paycom Soft position performs unexpectedly, Global Lighting 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 Lighting will offset losses from the drop in Global Lighting's long position.| Paycom Soft vs. Atlassian Corp Plc | Paycom Soft vs. Datadog | Paycom Soft vs. ServiceNow | Paycom Soft vs. Trade Desk |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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