Correlation Between VNET Group and Workday
Can any of the company-specific risk be diversified away by investing in both VNET Group and Workday 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 VNET Group and Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNET Group DRC and Workday, you can compare the effects of market volatilities on VNET Group 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 VNET Group with a short position of Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNET Group and Workday.
Diversification Opportunities for VNET Group and Workday
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between VNET and Workday is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and VNET Group 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 VNET Group DRC 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 VNET Group i.e., VNET Group and Workday go up and down completely randomly.
Pair Corralation between VNET Group and Workday
Given the investment horizon of 90 days VNET Group DRC is expected to under-perform the Workday. In addition to that, VNET Group is 5.65 times more volatile than Workday. It trades about -0.16 of its total potential returns per unit of risk. Workday is currently generating about -0.38 per unit of volatility. If you would invest 27,568 in Workday on January 25, 2024 and sell it today you would lose (1,922) from holding Workday or give up 6.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VNET Group DRC vs. Workday
Performance |
| Timeline |
| VNET Group DRC |
| Workday |
VNET Group and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNET Group and Workday
The main advantage of trading using opposite VNET Group and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday's long position.| VNET Group vs. CACI International | VNET Group vs. CDW Corp | VNET Group vs. Jack Henry Associates | VNET Group vs. Broadridge Financial Solutions |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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