Correlation Between Gartner and Workday
Can any of the company-specific risk be diversified away by investing in both Gartner 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 Gartner and Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gartner and Workday, you can compare the effects of market volatilities on Gartner 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 Gartner with a short position of Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gartner and Workday.
Diversification Opportunities for Gartner and Workday
Modest diversification
The 3 months correlation between Gartner and Workday is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gartner and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and Gartner 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 Gartner 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 Gartner i.e., Gartner and Workday go up and down completely randomly.
Pair Corralation between Gartner and Workday
Allowing for the 90-day total investment horizon Gartner is expected to generate 1.53 times less return on investment than Workday. But when comparing it to its historical volatility, Gartner is 1.17 times less risky than Workday. It trades about 0.05 of its potential returns per unit of risk. Workday is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 22,260 in Workday on February 6, 2024 and sell it today you would earn a total of 2,770 from holding Workday or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gartner vs. Workday
Performance |
| Timeline |
| Gartner |
| Workday |
Gartner and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gartner and Workday
The main advantage of trading using opposite Gartner and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gartner 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.| Gartner vs. FiscalNote Holdings | Gartner vs. Innodata | Gartner vs. Aurora Innovation | Gartner vs. Conduent |
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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