Correlation Between Paycor HCM and DHI

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

Diversification Opportunities for Paycor HCM and DHI

PaycorDHIDiversified AwayPaycorDHIDiversified Away100%
0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Paycor and DHI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Paycor HCM and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and Paycor HCM 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 Paycor HCM are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Paycor HCM i.e., Paycor HCM and DHI go up and down completely randomly.

Pair Corralation between Paycor HCM and DHI

Given the investment horizon of 90 days Paycor HCM is expected to generate 53.01 times less return on investment than DHI. But when comparing it to its historical volatility, Paycor HCM is 35.93 times less risky than DHI. It trades about 0.19 of its potential returns per unit of risk. DHI Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  234.00  in DHI Group on November 21, 2024 and sell it today you would earn a total of  64.00  from holding DHI Group or generate 27.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Paycor HCM  vs.  DHI Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030405060
JavaScript chart by amCharts 3.21.15PYCR DHX
       Timeline  
Paycor HCM 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Paycor HCM reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1617181920212223
DHI Group 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DHI Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical indicators, DHI showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.533.5

Paycor HCM and DHI Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.92-7.43-4.94-2.450.02.525.187.8310.4913.14 0.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15PYCR DHX
       Returns  

Pair Trading with Paycor HCM and DHI

The main advantage of trading using opposite Paycor HCM and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paycor HCM position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.
The idea behind Paycor HCM and DHI Group 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.
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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