Correlation Between Workiva and Matterport

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

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

Diversification Opportunities for Workiva and Matterport

0.75

Correlation Coefficient

Workiva  Matterport

Poor diversification

The 3 months correlation between Workiva and Matterport is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and Matterport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matterport and Workiva 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 Workiva are associated (or correlated) with Matterport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matterport has no effect on the direction of Workiva i.e., Workiva and Matterport go up and down completely randomly.

Pair Corralation between Workiva and Matterport

Allowing for the 90-day total investment horizon Workiva is expected to generate 1.15 times more return on investment than Matterport. However, Workiva is 1.15 times more volatile than Matterport. It trades about 0.31 of its potential returns per unit of risk. Matterport is currently generating about 0.11 per unit of risk. If you would invest  7,473  in Workiva on September 13, 2024 and sell it today you would earn a total of  2,993  from holding Workiva or generate 40.05% return on investment over 90 days.

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

Workiva  vs.  Matterport

Workiva

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Matterport

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matterport are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Matterport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Workiva and Matterport

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

The idea behind Workiva and Matterport 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 CEOs Directory module to screen CEOs from public companies around the world.