Correlation Between Momentive Global and Workiva

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

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

Diversification Opportunities for Momentive Global and Workiva

0.41

Correlation Coefficient

Momentive Global  Workiva

Very weak diversification

The 3 months correlation between Momentive and Workiva is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Momentive Global and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva and Momentive Global 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 Momentive Global 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 Momentive Global i.e., Momentive Global and Workiva go up and down completely randomly.

Pair Corralation between Momentive Global and Workiva

If you would invest  9,128  in Workiva on September 16, 2024 and sell it today you would earn a total of  1,259  from holding Workiva or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Momentive Global  vs.  Workiva

Momentive Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Momentive Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Momentive Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Workiva

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Momentive Global and Workiva

The main advantage of trading using opposite Momentive Global and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentive Global 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 Momentive Global 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.