Correlation Between Workiva and LivePerson

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

By analyzing existing cross correlation between Workiva and LivePerson, you can compare the effects of market volatilities on Workiva and LivePerson 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 Workiva with a short position of LivePerson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and LivePerson.

Diversification Opportunities for Workiva and LivePerson

0.02

Correlation Coefficient

Workiva  LivePerson

Significant diversification

The 3 months correlation between Workiva and LivePerson is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and LivePerson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivePerson and Workiva 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 Workiva are associated (or correlated) with LivePerson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivePerson has no effect on the direction of Workiva i.e., Workiva and LivePerson go up and down completely randomly.

Pair Corralation between Workiva and LivePerson

Allowing for the 90-day total investment horizon Workiva is expected to generate 0.86 times more return on investment than LivePerson. However, Workiva is 1.16 times less risky than LivePerson. It trades about 0.1 of its potential returns per unit of risk. LivePerson is currently generating about 0.02 per unit of risk. If you would invest  6,753  in Workiva on May 6, 2025 and sell it today you would earn a total of  1,677  from holding Workiva or generate 24.83% return on investment over 90 days.

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

Workiva  vs.  LivePerson

Workiva

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

LivePerson

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LivePerson are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, LivePerson is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Workiva and LivePerson

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

The idea behind Workiva and LivePerson 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.