Correlation Between Workday and Agora
Can any of the company-specific risk be diversified away by investing in both Workday and Agora 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 Agora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workday and Agora Inc, you can compare the effects of market volatilities on Workday and Agora 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 Agora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and Agora.
Diversification Opportunities for Workday and Agora
Weak diversification
The 3 months correlation between Workday and Agora is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Agora Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agora Inc 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 Agora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agora Inc has no effect on the direction of Workday i.e., Workday and Agora go up and down completely randomly.
Pair Corralation between Workday and Agora
Given the investment horizon of 90 days Workday is expected to under-perform the Agora. But the stock apears to be less risky and, when comparing its historical volatility, Workday is 3.93 times less risky than Agora. The stock trades about -0.01 of its potential returns per unit of risk. The Agora Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 291.00 in Agora Inc on November 3, 2024 and sell it today you would earn a total of 268.00 from holding Agora Inc or generate 92.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workday vs. Agora Inc
Performance |
| Timeline |
| Workday |
| Agora Inc |
Workday and Agora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workday and Agora
The main advantage of trading using opposite Workday and Agora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, Agora 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 Agora will offset losses from the drop in Agora's long position.| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |