Correlation Between Workday and Rumble

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

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

Diversification Opportunities for Workday and Rumble

0.65

Correlation Coefficient

Workday  Rumble

Poor diversification

The 3 months correlation between Workday and Rumble is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble 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 Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Workday i.e., Workday and Rumble go up and down completely randomly.

Pair Corralation between Workday and Rumble

Given the investment horizon of 90 days Workday is expected to generate 11.18 times less return on investment than Rumble. But when comparing it to its historical volatility, Workday is 3.38 times less risky than Rumble. It trades about 0.07 of its potential returns per unit of risk. Rumble Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  123.00  in Rumble Inc on September 12, 2024 and sell it today you would earn a total of  162.00  from holding Rumble Inc or generate 131.71% return on investment over 90 days.

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

Workday  vs.  Rumble Inc

Workday

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Workday are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Workday may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Rumble Inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental drivers, Rumble showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workday and Rumble

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

The idea behind Workday and Rumble 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.