Correlation Between Workspace Group and Unite Group

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

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

Diversification Opportunities for Workspace Group and Unite Group

0.97

Correlation Coefficient

Workspace Group  Unite Group

Almost no diversification

The 3 months correlation between Workspace and Unite is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Workspace Group PLC and Unite Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unite Group PLC and Workspace Group 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 Workspace Group PLC are associated (or correlated) with Unite Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unite Group PLC has no effect on the direction of Workspace Group i.e., Workspace Group and Unite Group go up and down completely randomly.

Pair Corralation between Workspace Group and Unite Group

Assuming the 90 days trading horizon Workspace Group PLC is expected to generate 1.32 times more return on investment than Unite Group. However, Workspace Group is 1.32 times more volatile than Unite Group PLC. It trades about 0.04 of its potential returns per unit of risk. Unite Group PLC is currently generating about 0.0 per unit of risk. If you would invest  40,090  in Workspace Group PLC on September 14, 2024 and sell it today you would earn a total of  11,510  from holding Workspace Group PLC or generate 28.71% return on investment over 90 days.

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

Workspace Group PLC  vs.  Unite Group PLC

Workspace Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workspace Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental 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.

Unite Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unite Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental 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 Workspace Group and Unite Group

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

The idea behind Workspace Group PLC and Unite Group PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.