Correlation Between Paycom Software and Micron Technology

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

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

Diversification Opportunities for Paycom Software and Micron Technology

-0.91

Correlation Coefficient

Paycom Software  Micron Technology

Pay attention - limited upside

The 3 months correlation between Paycom and Micron is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Paycom Software and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Paycom Software 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 Paycom Software are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Paycom Software i.e., Paycom Software and Micron Technology go up and down completely randomly.

Pair Corralation between Paycom Software and Micron Technology

Assuming the 90 days trading horizon Paycom Software is expected to under-perform the Micron Technology. But the stock apears to be less risky and, when comparing its historical volatility, Paycom Software is 1.75 times less risky than Micron Technology. The stock trades about -0.19 of its potential returns per unit of risk. The Micron Technology is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  10,767  in Micron Technology on August 8, 2025 and sell it today you would earn a total of  10,553  from holding Micron Technology or generate 98.01% return on investment over 90 days.

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

Paycom Software  vs.  Micron Technology

Paycom Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Paycom Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Micron Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Micron Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paycom Software and Micron Technology

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

The idea behind Paycom Software and Micron Technology 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.