Correlation Between Bank Of and Workiva
Can any of the company-specific risk be diversified away by investing in both Bank Of 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 Bank Of and Workiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Bank of and Workiva, you can compare the effects of market volatilities on Bank Of 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 Bank Of with a short position of Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Of and Workiva.
Diversification Opportunities for Bank Of and Workiva
Very weak diversification
The 3 months correlation between Bank and Workiva is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva and Bank Of 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 The Bank of 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 Bank Of i.e., Bank Of and Workiva go up and down completely randomly.
Pair Corralation between Bank Of and Workiva
Assuming the 90 days horizon The Bank of is expected to generate 0.35 times more return on investment than Workiva. However, The Bank of is 2.86 times less risky than Workiva. It trades about 0.38 of its potential returns per unit of risk. Workiva is currently generating about -0.09 per unit of risk. If you would invest 7,413 in The Bank of on November 2, 2024 and sell it today you would earn a total of 989.00 from holding The Bank of or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Bank of vs. Workiva
Performance |
| Timeline |
| The Bank |
| Workiva |
Bank Of and Workiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Of and Workiva
The main advantage of trading using opposite Bank Of and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Of 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.| Bank Of vs. Rayonier Advanced Materials | Bank Of vs. Heidelberg Materials AG | Bank Of vs. PLAYTIKA HOLDING DL 01 | Bank Of vs. COLUMBIA SPORTSWEAR |
| Workiva vs. Cass Information Systems | Workiva vs. Easy Software AG | Workiva vs. Information Services International Dentsu | Workiva vs. Linedata Services SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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