Correlation Between Workiva and Upland Software

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

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

Diversification Opportunities for Workiva and Upland Software

0.89

Correlation Coefficient

Workiva  Upland Software

Very poor diversification

The 3 months correlation between Workiva and Upland is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and Upland Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upland Software and Workiva 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 Workiva are associated (or correlated) with Upland Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upland Software has no effect on the direction of Workiva i.e., Workiva and Upland Software go up and down completely randomly.

Pair Corralation between Workiva and Upland Software

Allowing for the 90-day total investment horizon Workiva is expected to generate 0.38 times more return on investment than Upland Software. However, Workiva is 2.62 times less risky than Upland Software. It trades about 0.04 of its potential returns per unit of risk. Upland Software is currently generating about 0.01 per unit of risk. If you would invest  8,248  in Workiva on September 24, 2024 and sell it today you would earn a total of  3,230  from holding Workiva or generate 39.16% return on investment over 90 days.

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

Workiva  vs.  Upland Software

Workiva

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Upland Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upland Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Upland Software exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workiva and Upland Software

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

The idea behind Workiva and Upland Software 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.