Correlation Between Ke Holdings and Workiva
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and Workiva 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 Ke Holdings and Workiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Workiva, you can compare the effects of market volatilities on Ke Holdings and Workiva 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 Ke Holdings with a short position of Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Workiva.
Diversification Opportunities for Ke Holdings and Workiva
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BEKE and Workiva is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva and Ke Holdings 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 Ke Holdings are associated (or correlated) with Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Ke Holdings i.e., Ke Holdings and Workiva go up and down completely randomly.
Pair Corralation between Ke Holdings and Workiva
Given the investment horizon of 90 days Ke Holdings is expected to generate 1.0 times less return on investment than Workiva. In addition to that, Ke Holdings is 2.15 times more volatile than Workiva. It trades about 0.05 of its total potential returns per unit of risk. Workiva is currently generating about 0.12 per unit of volatility. If you would invest 7,556 in Workiva on September 3, 2024 and sell it today you would earn a total of 2,254 from holding Workiva or generate 29.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. Workiva
Performance |
| Timeline |
| Ke Holdings |
| Workiva |
Ke Holdings and Workiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Workiva
The main advantage of trading using opposite Ke Holdings and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, Workiva 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 Workiva will offset losses from the drop in Workiva's long position.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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