Correlation Between HubSpot and Workday

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

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

Diversification Opportunities for HubSpot and Workday

0.56

Correlation Coefficient

HubSpot  Workday

Very weak diversification

The 3 months correlation between HubSpot and Workday is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and HubSpot 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 HubSpot 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 HubSpot i.e., HubSpot and Workday go up and down completely randomly.

Pair Corralation between HubSpot and Workday

Given the investment horizon of 90 days HubSpot is expected to generate 1.16 times more return on investment than Workday. However, HubSpot is 1.16 times more volatile than Workday. It trades about 0.3 of its potential returns per unit of risk. Workday is currently generating about -0.03 per unit of risk. If you would invest  49,576  in HubSpot on September 2, 2024 and sell it today you would earn a total of  22,529  from holding HubSpot or generate 45.44% return on investment over 90 days.

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

HubSpot  vs.  Workday

HubSpot

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Workday

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Workday is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HubSpot and Workday

The main advantage of trading using opposite HubSpot and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HubSpot 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.

The idea behind HubSpot and Workday 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 Global Correlations module to find global opportunities by holding instruments from different markets.