Correlation Between Dayforce and MDA

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

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

Diversification Opportunities for Dayforce and MDA

-0.31

Correlation Coefficient

Dayforce  MDA

Very good diversification

The 3 months correlation between Dayforce and MDA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dayforce and MDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDA and Dayforce 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 Dayforce are associated (or correlated) with MDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDA has no effect on the direction of Dayforce i.e., Dayforce and MDA go up and down completely randomly.

Pair Corralation between Dayforce and MDA

Assuming the 90 days trading horizon Dayforce is expected to generate 15.1 times less return on investment than MDA. But when comparing it to its historical volatility, Dayforce is 1.23 times less risky than MDA. It trades about 0.03 of its potential returns per unit of risk. MDA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,535  in MDA on April 23, 2025 and sell it today you would earn a total of  1,790  from holding MDA or generate 70.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Dayforce  vs.  MDA

Dayforce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dayforce is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

MDA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MDA are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MDA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dayforce and MDA

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

The idea behind Dayforce and MDA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.