Correlation Between Workday and Sabre Corp

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

Diversification Opportunities for Workday and Sabre Corp

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Workday and Sabre is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Sabre Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corp and Workday 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 Workday are associated (or correlated) with Sabre Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corp has no effect on the direction of Workday i.e., Workday and Sabre Corp go up and down completely randomly.

Pair Corralation between Workday and Sabre Corp

Given the investment horizon of 90 days Workday is expected to under-perform the Sabre Corp. But the stock apears to be less risky and, when comparing its historical volatility, Workday is 1.84 times less risky than Sabre Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Sabre Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  758.00  in Sabre Corp on April 5, 2022 and sell it today you would lose (144.00)  from holding Sabre Corp or give up 19.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Workday  vs.  Sabre Corp

 Performance (%) 
      Timeline 
Workday 
Workday Performance
0 of 100
Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Workday Price Channel

Sabre Corp 
Sabre Performance
0 of 100
Over the last 90 days Sabre Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.1
Dividend Date
2020-03-30
Ex Dividend Date
2020-03-19

Sabre Price Channel

Workday and Sabre Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Workday and Sabre Corp

The main advantage of trading using opposite Workday and Sabre Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, Sabre Corp 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 Sabre Corp will offset losses from the drop in Sabre Corp's long position.
The idea behind Workday and Sabre Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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