Correlation Between Dayforce and Real Matters

Can any of the company-specific risk be diversified away by investing in both Dayforce and Real Matters 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 Dayforce and Real Matters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dayforce and Real Matters, you can compare the effects of market volatilities on Dayforce and Real Matters 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 Dayforce with a short position of Real Matters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dayforce and Real Matters.

Diversification Opportunities for Dayforce and Real Matters

-0.88

Correlation Coefficient

Dayforce  Real Matters

Pay attention - limited upside

The 3 months correlation between Dayforce and Real is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dayforce and Real Matters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Matters and Dayforce 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 Dayforce are associated (or correlated) with Real Matters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Matters has no effect on the direction of Dayforce i.e., Dayforce and Real Matters go up and down completely randomly.

Pair Corralation between Dayforce and Real Matters

Assuming the 90 days trading horizon Dayforce is expected to generate 0.84 times more return on investment than Real Matters. However, Dayforce is 1.19 times less risky than Real Matters. It trades about 0.24 of its potential returns per unit of risk. Real Matters is currently generating about -0.12 per unit of risk. If you would invest  8,104  in Dayforce on September 15, 2024 and sell it today you would earn a total of  2,886  from holding Dayforce or generate 35.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Dayforce  vs.  Real Matters

Dayforce

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dayforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Real Matters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Matters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dayforce and Real Matters

The main advantage of trading using opposite Dayforce and Real Matters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dayforce position performs unexpectedly, Real Matters 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 Real Matters will offset losses from the drop in Real Matters' long position.

The idea behind Dayforce and Real Matters 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.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.