Correlation Between Inflection Point and Dayforce

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

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

Diversification Opportunities for Inflection Point and Dayforce

0.34

Correlation Coefficient

Inflection Point  Dayforce

Weak diversification

The 3 months correlation between Inflection and Dayforce is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of Inflection Point i.e., Inflection Point and Dayforce go up and down completely randomly.

Pair Corralation between Inflection Point and Dayforce

Assuming the 90 days horizon Inflection Point is expected to generate 1.13 times less return on investment than Dayforce. In addition to that, Inflection Point is 1.71 times more volatile than Dayforce. It trades about 0.12 of its total potential returns per unit of risk. Dayforce is currently generating about 0.23 per unit of volatility. If you would invest  5,918  in Dayforce on September 18, 2024 and sell it today you would earn a total of  1,821  from holding Dayforce or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Inflection Point Acquisition  vs.  Dayforce

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dayforce

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dayforce showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inflection Point and Dayforce

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

The idea behind Inflection Point Acquisition and Dayforce 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.