Correlation Between Paycom Software and Lloyds Banking

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Paycom Software and Lloyds Banking 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 Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paycom Software and Lloyds Banking Group, you can compare the effects of market volatilities on Paycom Software and Lloyds Banking 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 Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paycom Software and Lloyds Banking.

Diversification Opportunities for Paycom Software and Lloyds Banking

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Paycom and Lloyds is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Paycom Software and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group 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 Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Paycom Software i.e., Paycom Software and Lloyds Banking go up and down completely randomly.

Pair Corralation between Paycom Software and Lloyds Banking

Assuming the 90 days trading horizon Paycom Software is expected to generate 1.27 times less return on investment than Lloyds Banking. In addition to that, Paycom Software is 1.64 times more volatile than Lloyds Banking Group. It trades about 0.03 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.07 per unit of volatility. If you would invest  2,227  in Lloyds Banking Group on April 21, 2025 and sell it today you would earn a total of  141.00  from holding Lloyds Banking Group or generate 6.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.41%
ValuesDaily Returns

Paycom Software  vs.  Lloyds Banking Group

 Performance 
       Timeline  
Paycom Software 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Paycom Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Paycom Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Lloyds Banking Group 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Lloyds Banking may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Paycom Software and Lloyds Banking Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Paycom Software and Lloyds Banking

The main advantage of trading using opposite Paycom Software and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paycom Software position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.
The idea behind Paycom Software and Lloyds Banking Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Commodity Directory
Find actively traded commodities issued by global exchanges