Correlation Between Workday and Digital Turbine

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

By analyzing existing cross correlation between Workday and Digital Turbine, you can compare the effects of market volatilities on Workday and Digital Turbine 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 Digital Turbine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and Digital Turbine.

Diversification Opportunities for Workday and Digital Turbine

-0.4

Correlation Coefficient

Workday  Digital Turbine

Very good diversification

The 3 months correlation between Workday and Digital is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine 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 Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of Workday i.e., Workday and Digital Turbine go up and down completely randomly.

Pair Corralation between Workday and Digital Turbine

Given the investment horizon of 90 days Workday is expected to under-perform the Digital Turbine. But the stock apears to be less risky and, when comparing its historical volatility, Workday is 4.3 times less risky than Digital Turbine. The stock trades about -0.12 of its potential returns per unit of risk. The Digital Turbine is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  437.00  in Digital Turbine on May 12, 2025 and sell it today you would lose (2.00) from holding Digital Turbine or give up 0.46% of portfolio value over 90 days.

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

Workday  vs.  Digital Turbine

Workday

Risk-Adjusted Performance

Weakest

Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Digital Turbine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Turbine are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Digital Turbine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workday and Digital Turbine

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

The idea behind Workday and Digital Turbine 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .