Correlation Between Workday and Freight Technologies

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

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

Diversification Opportunities for Workday and Freight Technologies

0.14

Correlation Coefficient

Workday  Freight Technologies

Average diversification

The 3 months correlation between Workday and Freight is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Freight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freight Technologies and Workday 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 Workday are associated (or correlated) with Freight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freight Technologies has no effect on the direction of Workday i.e., Workday and Freight Technologies go up and down completely randomly.

Pair Corralation between Workday and Freight Technologies

Given the investment horizon of 90 days Workday is expected to generate 0.23 times more return on investment than Freight Technologies. However, Workday is 4.31 times less risky than Freight Technologies. It trades about -0.02 of its potential returns per unit of risk. Freight Technologies is currently generating about -0.19 per unit of risk. If you would invest  25,860  in Workday on September 4, 2024 and sell it today you would lose (714.00) from holding Workday or give up 2.76% of portfolio value over 90 days.

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

Workday  vs.  Freight Technologies

Workday

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Workday is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Freight Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freight Technologies 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Workday and Freight Technologies

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

The idea behind Workday and Freight Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.