Correlation Between Deluxe and Hirequest

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

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

Diversification Opportunities for Deluxe and Hirequest

0.45

Correlation Coefficient

Deluxe  Hirequest

Very weak diversification

The 3 months correlation between Deluxe and Hirequest is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Hirequest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hirequest and Deluxe 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 Deluxe are associated (or correlated) with Hirequest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hirequest has no effect on the direction of Deluxe i.e., Deluxe and Hirequest go up and down completely randomly.

Pair Corralation between Deluxe and Hirequest

Considering the 90-day investment horizon Deluxe is expected to generate 0.78 times more return on investment than Hirequest. However, Deluxe is 1.28 times less risky than Hirequest. It trades about 0.05 of its potential returns per unit of risk. Hirequest is currently generating about 0.01 per unit of risk. If you would invest  1,503  in Deluxe on May 7, 2025 and sell it today you would earn a total of  90.00  from holding Deluxe or generate 5.99% return on investment over 90 days.

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

Deluxe  vs.  Hirequest

Deluxe

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Deluxe may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Hirequest

Risk-Adjusted Performance

Weakest

Over the last 90 days Hirequest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Hirequest is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Deluxe and Hirequest

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

The idea behind Deluxe and Hirequest 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.