Correlation Between CDK Global and Workday
Can any of the company-specific risk be diversified away by investing in both CDK Global and Workday 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 CDK Global and Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDK Global Holdings and Workday, you can compare the effects of market volatilities on CDK Global and Workday 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 CDK Global with a short position of Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDK Global and Workday.
Diversification Opportunities for CDK Global and Workday
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CDK and Workday is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CDK Global Holdings and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and CDK Global 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 CDK Global Holdings are associated (or correlated) with Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of CDK Global i.e., CDK Global and Workday go up and down completely randomly.
Pair Corralation between CDK Global and Workday
If you would invest 18,909 in Workday on January 18, 2024 and sell it today you would earn a total of 6,860 from holding Workday or generate 36.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
CDK Global Holdings vs. Workday
Performance |
| Timeline |
| CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Workday |
CDK Global and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDK Global and Workday
The main advantage of trading using opposite CDK Global and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDK Global position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday's long position.| CDK Global vs. Hasbro Inc | CDK Global vs. Pinterest | CDK Global vs. Infosys Ltd ADR | CDK Global vs. JD Sports Fashion |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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