Correlation Between Workiva and Bm Technologies
Can any of the company-specific risk be diversified away by investing in both Workiva and Bm Technologies 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 Workiva and Bm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workiva and Bm Technologies, you can compare the effects of market volatilities on Workiva and Bm Technologies 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 Workiva with a short position of Bm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and Bm Technologies.
Diversification Opportunities for Workiva and Bm Technologies
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Workiva and BMTX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and Bm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bm Technologies and Workiva 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 Workiva are associated (or correlated) with Bm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bm Technologies has no effect on the direction of Workiva i.e., Workiva and Bm Technologies go up and down completely randomly.
Pair Corralation between Workiva and Bm Technologies
Allowing for the 90-day total investment horizon Workiva is expected to generate 3.16 times less return on investment than Bm Technologies. But when comparing it to its historical volatility, Workiva is 2.94 times less risky than Bm Technologies. It trades about 0.03 of its potential returns per unit of risk. Bm Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 488.00 in Bm Technologies on August 25, 2024 and sell it today you would lose (11.00) from holding Bm Technologies or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workiva vs. Bm Technologies
Performance |
| Timeline |
| Workiva |
| Bm Technologies |
Workiva and Bm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workiva and Bm Technologies
The main advantage of trading using opposite Workiva and Bm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva position performs unexpectedly, Bm Technologies 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 Bm Technologies will offset losses from the drop in Bm Technologies' long position.The idea behind Workiva and Bm Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bm Technologies vs. OLB Group | Bm Technologies vs. Friendable | Bm Technologies vs. Trust Stamp | Bm Technologies vs. Infobird Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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