Correlation Between Paycom Soft and AMP
Can any of the company-specific risk be diversified away by investing in both Paycom Soft and AMP 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 AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paycom Soft and AMP, you can compare the effects of market volatilities on Paycom Soft and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paycom Soft and AMP.
Diversification Opportunities for Paycom Soft and AMP
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Paycom and AMP is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Paycom Soft and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Paycom Soft i.e., Paycom Soft and AMP go up and down completely randomly.
Pair Corralation between Paycom Soft and AMP
Given the investment horizon of 90 days Paycom Soft is expected to under-perform the AMP. In addition to that, Paycom Soft is 1.32 times more volatile than AMP. It trades about -0.02 of its total potential returns per unit of risk. AMP is currently generating about 0.07 per unit of volatility. If you would invest 58.00 in AMP on September 12, 2024 and sell it today you would earn a total of 37.00 from holding AMP or generate 63.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.05% |
| Values | Daily Returns |
Paycom Soft vs. AMP
Performance |
| Timeline |
| Paycom Soft |
| AMP |
Paycom Soft and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paycom Soft and AMP
The main advantage of trading using opposite Paycom Soft and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paycom Soft position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Paycom Soft vs. Atlassian Corp Plc | Paycom Soft vs. Datadog | Paycom Soft vs. ServiceNow | Paycom Soft vs. Trade Desk |
| AMP vs. STRAYER EDUCATION | AMP vs. STMicroelectronics NV | AMP vs. American Public Education | AMP vs. KIMBALL ELECTRONICS |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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