Correlation Between Workday and Grab Holdings
Can any of the company-specific risk be diversified away by investing in both Workday and Grab 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 Grab Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workday and Grab Holdings, you can compare the effects of market volatilities on Workday and Grab 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 Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and Grab Holdings.
Diversification Opportunities for Workday and Grab Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Workday and Grab is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Grab Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab 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 Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings has no effect on the direction of Workday i.e., Workday and Grab Holdings go up and down completely randomly.
Pair Corralation between Workday and Grab Holdings
Given the investment horizon of 90 days Workday is expected to generate 0.89 times more return on investment than Grab Holdings. However, Workday is 1.12 times less risky than Grab Holdings. It trades about -0.22 of its potential returns per unit of risk. Grab Holdings is currently generating about -0.26 per unit of risk. If you would invest 26,683 in Workday on October 20, 2024 and sell it today you would lose (1,719) from holding Workday or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workday vs. Grab Holdings
Performance |
| Timeline |
| Workday |
| Grab Holdings |
Workday and Grab Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workday and Grab Holdings
The main advantage of trading using opposite Workday and Grab Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, Grab 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 Grab Holdings will offset losses from the drop in Grab Holdings' long position.| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
| Grab Holdings vs. LYFT Inc | Grab Holdings vs. Kingsoft Cloud Holdings | Grab Holdings vs. AMTD Digital | Grab Holdings vs. Uber Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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