Correlation Between Workday and MMTEC

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

By analyzing existing cross correlation between Workday and MMTEC Inc, you can compare the effects of market volatilities on Workday and MMTEC 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 MMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and MMTEC.

Diversification Opportunities for Workday and MMTEC

-0.68

Correlation Coefficient

Workday  MMTEC

Excellent diversification

The 3 months correlation between Workday and MMTEC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Workday and MMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMTEC Inc 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 MMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMTEC Inc has no effect on the direction of Workday i.e., Workday and MMTEC go up and down completely randomly.

Pair Corralation between Workday and MMTEC

Given the investment horizon of 90 days Workday is expected to generate 0.22 times more return on investment than MMTEC. However, Workday is 4.64 times less risky than MMTEC. It trades about 0.08 of its potential returns per unit of risk. MMTEC Inc is currently generating about -0.03 per unit of risk. If you would invest  22,472  in Workday on September 27, 2024 and sell it today you would earn a total of  4,466  from holding Workday or generate 19.87% return on investment over 90 days.

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

Workday  vs.  MMTEC Inc

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.

MMTEC Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MMTEC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic 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 Workday and MMTEC

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

The idea behind Workday and MMTEC Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.