Correlation Between Nasdaq and Workforce Holdings

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

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

Diversification Opportunities for Nasdaq and Workforce Holdings

-0.6

Correlation Coefficient

Nasdaq  Workforce Holdings

Excellent diversification

The 3 months correlation between Nasdaq and Workforce is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Workforce Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workforce Holdings and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Workforce Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workforce Holdings has no effect on the direction of Nasdaq i.e., Nasdaq and Workforce Holdings go up and down completely randomly.

Pair Corralation between Nasdaq and Workforce Holdings

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Workforce Holdings. In addition to that, Nasdaq is 6.46 times more volatile than Workforce Holdings. It trades about -0.22 of its total potential returns per unit of risk. Workforce Holdings is currently generating about 0.23 per unit of volatility. If you would invest  14,500  in Workforce Holdings on September 24, 2024 and sell it today you would earn a total of  100.00  from holding Workforce Holdings or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Nasdaq Inc  vs.  Workforce Holdings

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Workforce Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workforce Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Nasdaq and Workforce Holdings

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

The idea behind Nasdaq Inc and Workforce Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.