Correlation Between Workday and Amentum Holdings
Can any of the company-specific risk be diversified away by investing in both Workday and Amentum Holdings 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 Amentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workday and Amentum Holdings, you can compare the effects of market volatilities on Workday and Amentum Holdings 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 Amentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and Amentum Holdings.
Diversification Opportunities for Workday and Amentum Holdings
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Workday and Amentum is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Amentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amentum Holdings 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 Amentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amentum Holdings has no effect on the direction of Workday i.e., Workday and Amentum Holdings go up and down completely randomly.
Pair Corralation between Workday and Amentum Holdings
Given the investment horizon of 90 days Workday is expected to generate 0.51 times more return on investment than Amentum Holdings. However, Workday is 1.95 times less risky than Amentum Holdings. It trades about 0.09 of its potential returns per unit of risk. Amentum Holdings is currently generating about -0.19 per unit of risk. If you would invest 24,114 in Workday on September 4, 2024 and sell it today you would earn a total of 1,032 from holding Workday or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workday vs. Amentum Holdings
Performance |
| Timeline |
| Workday |
| Amentum Holdings |
Workday and Amentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workday and Amentum Holdings
The main advantage of trading using opposite Workday and Amentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, Amentum Holdings 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 Amentum Holdings will offset losses from the drop in Amentum Holdings' long position.| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
| Amentum Holdings vs. BCE Inc | Amentum Holdings vs. Anterix | Amentum Holdings vs. The Hanover Insurance | Amentum Holdings vs. United Fire Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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