Correlation Between Workday and LYFT
Can any of the company-specific risk be diversified away by investing in both Workday and LYFT 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 LYFT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workday and LYFT Inc, you can compare the effects of market volatilities on Workday and LYFT 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 LYFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and LYFT.
Diversification Opportunities for Workday and LYFT
Very weak diversification
The 3 months correlation between Workday and LYFT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Workday and LYFT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYFT 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 LYFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYFT Inc has no effect on the direction of Workday i.e., Workday and LYFT go up and down completely randomly.
Pair Corralation between Workday and LYFT
Given the investment horizon of 90 days Workday is expected to under-perform the LYFT. But the stock apears to be less risky and, when comparing its historical volatility, Workday is 1.88 times less risky than LYFT. The stock trades about -0.22 of its potential returns per unit of risk. The LYFT Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,358 in LYFT Inc on October 20, 2024 and sell it today you would lose (17.00) from holding LYFT Inc or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workday vs. LYFT Inc
Performance |
| Timeline |
| Workday |
| LYFT Inc |
Workday and LYFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workday and LYFT
The main advantage of trading using opposite Workday and LYFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, LYFT 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 LYFT will offset losses from the drop in LYFT'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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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