Correlation Between Manhattan Associates and Workday

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

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

Diversification Opportunities for Manhattan Associates and Workday

0.34

Correlation Coefficient

Manhattan Associates  Workday

Weak diversification

The 3 months correlation between Manhattan and Workday is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and Workday go up and down completely randomly.

Pair Corralation between Manhattan Associates and Workday

Given the investment horizon of 90 days Manhattan Associates is expected to generate 1.23 times less return on investment than Workday. But when comparing it to its historical volatility, Manhattan Associates is 1.0 times less risky than Workday. It trades about 0.06 of its potential returns per unit of risk. Workday is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  22,472  in Workday on September 27, 2024 and sell it today you would earn a total of  4,432  from holding Workday or generate 19.72% return on investment over 90 days.

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

Manhattan Associates  vs.  Workday

Manhattan Associates

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Manhattan Associates is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Workday

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Workday are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Workday may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Manhattan Associates and Workday

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

The idea behind Manhattan Associates and Workday 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.