Correlation Between Bill and Workday
Can any of the company-specific risk be diversified away by investing in both Bill and Workday 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 Bill and Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Com Holdings and Workday, you can compare the effects of market volatilities on Bill and Workday 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 Bill with a short position of Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and Workday.
Diversification Opportunities for Bill and Workday
Very weak diversification
The 3 months correlation between Bill and Workday is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and Bill 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 Bill Com Holdings are associated (or correlated) with Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Bill i.e., Bill and Workday go up and down completely randomly.
Pair Corralation between Bill and Workday
Given the investment horizon of 90 days Bill Com Holdings is expected to generate 2.2 times more return on investment than Workday. However, Bill is 2.2 times more volatile than Workday. It trades about 0.47 of its potential returns per unit of risk. Workday is currently generating about 0.18 per unit of risk. If you would invest 5,625 in Bill Com Holdings on August 23, 2024 and sell it today you would earn a total of 3,373 from holding Bill Com Holdings or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bill Com Holdings vs. Workday
Performance |
| Timeline |
| Bill Com Holdings |
| Workday |
Bill and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill and Workday
The main advantage of trading using opposite Bill and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday's long position.| Bill vs. Aquagold International | Bill vs. Small Cap Core | Bill vs. Morningstar Unconstrained Allocation | Bill vs. SPACE |
| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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