Correlation Between TriNet and Paylocity Holdng

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

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

Diversification Opportunities for TriNet and Paylocity Holdng

0.69

Correlation Coefficient

TriNet  Paylocity Holdng

Poor diversification

The 3 months correlation between TriNet and Paylocity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TriNet Group and Paylocity Holdng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paylocity Holdng and TriNet 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 TriNet Group are associated (or correlated) with Paylocity Holdng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paylocity Holdng has no effect on the direction of TriNet i.e., TriNet and Paylocity Holdng go up and down completely randomly.

Pair Corralation between TriNet and Paylocity Holdng

Given the investment horizon of 90 days TriNet Group is expected to under-perform the Paylocity Holdng. In addition to that, TriNet is 1.16 times more volatile than Paylocity Holdng. It trades about -0.21 of its total potential returns per unit of risk. Paylocity Holdng is currently generating about -0.14 per unit of volatility. If you would invest  20,039  in Paylocity Holdng on May 18, 2025 and sell it today you would lose (2,843) from holding Paylocity Holdng or give up 14.19% of portfolio value over 90 days.

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

TriNet Group  vs.  Paylocity Holdng

TriNet Group

Risk-Adjusted Performance

Weakest

Over the last 90 days TriNet Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Paylocity Holdng

Risk-Adjusted Performance

Weakest

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

Pair Trading with TriNet and Paylocity Holdng

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

The idea behind TriNet Group and Paylocity Holdng 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.