Correlation Between Workday and CDK Global
Can any of the company-specific risk be diversified away by investing in both Workday and CDK Global 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 CDK Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workday and CDK Global Holdings, you can compare the effects of market volatilities on Workday and CDK Global 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 CDK Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and CDK Global.
Diversification Opportunities for Workday and CDK Global
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Workday and CDK is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Workday and CDK Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDK Global Holdings 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 CDK Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDK Global Holdings has no effect on the direction of Workday i.e., Workday and CDK Global go up and down completely randomly.
Pair Corralation between Workday and CDK Global
If you would invest 5,476 in CDK Global Holdings on January 24, 2024 and sell it today you would earn a total of 0.00 from holding CDK Global Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Workday vs. CDK Global Holdings
Performance |
| Timeline |
| Workday |
| CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Workday and CDK Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workday and CDK Global
The main advantage of trading using opposite Workday and CDK Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, CDK Global 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 CDK Global will offset losses from the drop in CDK Global's long position.The idea behind Workday and CDK Global Holdings 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.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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