Correlation Between Workiva and SSC Technologies
Can any of the company-specific risk be diversified away by investing in both Workiva and SSC 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 SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workiva and SSC Technologies Holdings, you can compare the effects of market volatilities on Workiva and SSC 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 SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and SSC Technologies.
Diversification Opportunities for Workiva and SSC Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Workiva and SSC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and SSC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Holdings 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Holdings has no effect on the direction of Workiva i.e., Workiva and SSC Technologies go up and down completely randomly.
Pair Corralation between Workiva and SSC Technologies
Allowing for the 90-day total investment horizon Workiva is expected to generate 1.24 times less return on investment than SSC Technologies. In addition to that, Workiva is 1.72 times more volatile than SSC Technologies Holdings. It trades about 0.02 of its total potential returns per unit of risk. SSC Technologies Holdings is currently generating about 0.05 per unit of volatility. If you would invest 6,187 in SSC Technologies Holdings on October 30, 2024 and sell it today you would earn a total of 1,882 from holding SSC Technologies Holdings or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workiva vs. SSC Technologies Holdings
Performance |
| Timeline |
| Workiva |
| SSC Technologies Holdings |
Workiva and SSC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workiva and SSC Technologies
The main advantage of trading using opposite Workiva and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva position performs unexpectedly, SSC 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 SSC Technologies will offset losses from the drop in SSC Technologies' long position.The idea behind Workiva and SSC Technologies Holdings 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.| SSC Technologies vs. Aspen Technology | SSC Technologies vs. Bentley Systems | SSC Technologies vs. Tyler Technologies | SSC Technologies vs. Blackbaud |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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