Correlation Between Information Services and Dayforce

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

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

Diversification Opportunities for Information Services and Dayforce

-0.42

Correlation Coefficient

Information Services  Dayforce

Very good diversification

The 3 months correlation between Information and Dayforce is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Information Services and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce and Information Services 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 Information Services 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 Information Services i.e., Information Services and Dayforce go up and down completely randomly.

Pair Corralation between Information Services and Dayforce

Assuming the 90 days trading horizon Information Services is expected to generate 0.61 times more return on investment than Dayforce. However, Information Services is 1.63 times less risky than Dayforce. It trades about 0.26 of its potential returns per unit of risk. Dayforce is currently generating about -0.06 per unit of risk. If you would invest  2,542  in Information Services on May 8, 2025 and sell it today you would earn a total of  586.00  from holding Information Services or generate 23.05% return on investment over 90 days.

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

Information Services  vs.  Dayforce

Information Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Information Services displayed solid returns over the last few months and may actually be approaching a breakup point.

Dayforce

Risk-Adjusted Performance

Weakest

Over the last 90 days Dayforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Information Services and Dayforce

The main advantage of trading using opposite Information Services and Dayforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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 Information Services 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.