Correlation Between VCI Global and Paycor HCM

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

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

Diversification Opportunities for VCI Global and Paycor HCM

-0.81

Correlation Coefficient

VCI Global  Paycor HCM

Pay attention - limited upside

The 3 months correlation between VCI and Paycor is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Paycor HCM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycor HCM and VCI Global 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 VCI Global Limited are associated (or correlated) with Paycor HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paycor HCM has no effect on the direction of VCI Global i.e., VCI Global and Paycor HCM go up and down completely randomly.

Pair Corralation between VCI Global and Paycor HCM

Given the investment horizon of 90 days VCI Global Limited is expected to generate 9.82 times more return on investment than Paycor HCM. However, VCI Global is 9.82 times more volatile than Paycor HCM. It trades about 0.03 of its potential returns per unit of risk. Paycor HCM is currently generating about 0.21 per unit of risk. If you would invest  696.00  in VCI Global Limited on September 2, 2024 and sell it today you would lose (257.00) from holding VCI Global Limited or give up 36.93% of portfolio value over 90 days.

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

VCI Global Limited  vs.  Paycor HCM

VCI Global Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VCI Global Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, VCI Global reported solid returns over the last few months and may actually be approaching a breakup point.

Paycor HCM

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 16 (%) 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.

Pair Trading with VCI Global and Paycor HCM

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

The idea behind VCI Global Limited and Paycor HCM 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.