Correlation Between Workday and Dayforce

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

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

Diversification Opportunities for Workday and Dayforce

0.2

Correlation Coefficient

Workday  Dayforce

Modest diversification

The 3 months correlation between Workday and Dayforce is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce 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 Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of Workday i.e., Workday and Dayforce go up and down completely randomly.

Pair Corralation between Workday and Dayforce

Given the investment horizon of 90 days Workday is expected to generate 28.24 times less return on investment than Dayforce. But when comparing it to its historical volatility, Workday is 1.86 times less risky than Dayforce. It trades about 0.01 of its potential returns per unit of risk. Dayforce is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,727  in Dayforce on July 3, 2025 and sell it today you would earn a total of  1,162  from holding Dayforce or generate 20.29% return on investment over 90 days.

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

Workday  vs.  Dayforce

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 fairly strong basic indicators, Workday is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Dayforce

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Dayforce showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workday and Dayforce

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

The idea behind Workday and Dayforce 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.