Correlation Between VIRG NATL and Workiva

Can any of the company-specific risk be diversified away by investing in both VIRG NATL and Workiva 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 VIRG NATL and Workiva into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIRG NATL BANKSH and Workiva, you can compare the effects of market volatilities on VIRG NATL and Workiva 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 VIRG NATL with a short position of Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRG NATL and Workiva.

Diversification Opportunities for VIRG NATL and Workiva

0.67

Correlation Coefficient

VIRG NATL  Workiva

Poor diversification

The 3 months correlation between VIRG and Workiva is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva and VIRG NATL 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 VIRG NATL BANKSH are associated (or correlated) with Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of VIRG NATL i.e., VIRG NATL and Workiva go up and down completely randomly.

Pair Corralation between VIRG NATL and Workiva

Assuming the 90 days horizon VIRG NATL is expected to generate 21.03 times less return on investment than Workiva. In addition to that, VIRG NATL is 1.4 times more volatile than Workiva. It trades about 0.01 of its total potential returns per unit of risk. Workiva is currently generating about 0.3 per unit of volatility. If you would invest  7,050  in Workiva on September 23, 2024 and sell it today you would earn a total of  3,550  from holding Workiva or generate 50.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

VIRG NATL BANKSH  vs.  Workiva

VIRG NATL BANKSH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIRG NATL BANKSH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIRG NATL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Workiva

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Workiva reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIRG NATL and Workiva

The main advantage of trading using opposite VIRG NATL and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRG NATL position performs unexpectedly, Workiva 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 Workiva will offset losses from the drop in Workiva's long position.

The idea behind VIRG NATL BANKSH and Workiva 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..