This module allows you to analyze existing cross correlation between DOW and Workday. You can compare the effects of market volatilities on DOW and Workday 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 DOW with a short position of Workday. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Workday.
Given the investment horizon of 30 days, DOW is expected to generate 1.81 times less return on investment than Workday. But when comparing it to its historical volatility, DOW is 3.17 times less risky than Workday. It trades about 0.12 of its potential returns per unit of risk. Workday is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12,956 in Workday on June 19, 2018 and sell it today you would earn a total of 322.00 from holding Workday or generate 2.49% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding DOW and Workday Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Workday and DOW 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 DOW are associated (or correlated) with Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of DOW i.e. DOW and Workday go up and down completely randomly.
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