Correlation Between Paycor HCM and Asure Software

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

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

Diversification Opportunities for Paycor HCM and Asure Software

0.47

Correlation Coefficient

Paycor HCM  Asure Software

Very weak diversification

The 3 months correlation between Paycor and Asure is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Paycor HCM and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Paycor HCM 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 Paycor HCM are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Paycor HCM i.e., Paycor HCM and Asure Software go up and down completely randomly.

Pair Corralation between Paycor HCM and Asure Software

Given the investment horizon of 90 days Paycor HCM is expected to generate 0.54 times more return on investment than Asure Software. However, Paycor HCM is 1.84 times less risky than Asure Software. It trades about 0.3 of its potential returns per unit of risk. Asure Software is currently generating about 0.0 per unit of risk. If you would invest  1,389  in Paycor HCM on August 14, 2024 and sell it today you would earn a total of  362.00  from holding Paycor HCM or generate 26.06% return on investment over 90 days.

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

Paycor HCM  vs.  Asure Software

Paycor HCM

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Paycor HCM are ranked lower than 20 (%) 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.

Asure Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paycor HCM and Asure Software

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

The idea behind Paycor HCM and Asure Software 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.