Correlation Between Omnia Wellness and Workday

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Can any of the company-specific risk be diversified away by investing in both Omnia Wellness 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 Omnia Wellness and Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnia Wellness and Workday, you can compare the effects of market volatilities on Omnia Wellness 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 Omnia Wellness with a short position of Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnia Wellness and Workday.

Diversification Opportunities for Omnia Wellness and Workday

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Omnia and Workday is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Omnia Wellness and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday and Omnia Wellness 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 Omnia Wellness 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 Omnia Wellness i.e., Omnia Wellness and Workday go up and down completely randomly.

Pair Corralation between Omnia Wellness and Workday

Given the investment horizon of 90 days Omnia Wellness is expected to under-perform the Workday. In addition to that, Omnia Wellness is 7.29 times more volatile than Workday. It trades about -0.01 of its total potential returns per unit of risk. Workday is currently generating about 0.49 per unit of volatility. If you would invest  13,874  in Workday on May 17, 2022 and sell it today you would earn a total of  4,081  from holding Workday or generate 29.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Omnia Wellness  vs.  Workday

 Performance (%) 
       Timeline  
Omnia Wellness 
Omnia Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Omnia Wellness are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Omnia Wellness reported solid returns over the last few months and may actually be approaching a breakup point.

Omnia Price Channel

Workday 
Workday Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Workday are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Workday may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Workday Price Channel

Omnia Wellness and Workday Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Omnia Wellness and Workday

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

Omnia Wellness

Pair trading matchups for Omnia Wellness

The idea behind Omnia Wellness 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.
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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