Correlation Between Workday and ReposiTrak

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

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

Diversification Opportunities for Workday and ReposiTrak

0.18

Correlation Coefficient

Workday  ReposiTrak

Average diversification

The 3 months correlation between Workday and ReposiTrak is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Workday and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak 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 ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of Workday i.e., Workday and ReposiTrak go up and down completely randomly.

Pair Corralation between Workday and ReposiTrak

Given the investment horizon of 90 days Workday is expected to generate 0.93 times more return on investment than ReposiTrak. However, Workday is 1.08 times less risky than ReposiTrak. It trades about -0.04 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.05 per unit of risk. If you would invest  26,539  in Workday on December 23, 2024 and sell it today you would lose (1,590) from holding Workday or give up 5.99% of portfolio value over 90 days.

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

Workday  vs.  ReposiTrak

Workday

Risk-Adjusted Performance

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.

ReposiTrak

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReposiTrak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Workday and ReposiTrak

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

The idea behind Workday and ReposiTrak 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.