Correlation Between Workday and Defentect

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

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

Diversification Opportunities for Workday and Defentect

0.14

Correlation Coefficient

Workday  Defentect

Average diversification

The 3 months correlation between Workday and Defentect is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Defentect Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defentect Group 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 Defentect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defentect Group has no effect on the direction of Workday i.e., Workday and Defentect go up and down completely randomly.

Pair Corralation between Workday and Defentect

Given the investment horizon of 90 days Workday is expected to under-perform the Defentect. But the stock apears to be less risky and, when comparing its historical volatility, Workday is 1.62 times less risky than Defentect. The stock trades about -0.13 of its potential returns per unit of risk. The Defentect Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  0.41  in Defentect Group on May 13, 2025 and sell it today you would lose (0.03) from holding Defentect Group or give up 7.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Workday  vs.  Defentect Group

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 uncertain 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.

Defentect Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Defentect Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Defentect is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Workday and Defentect

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

The idea behind Workday and Defentect Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.