Correlation Between Workiva and FalconStor Software
Can any of the company-specific risk be diversified away by investing in both Workiva and FalconStor Software 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 FalconStor Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workiva and FalconStor Software, you can compare the effects of market volatilities on Workiva and FalconStor Software 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 FalconStor Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and FalconStor Software.
Diversification Opportunities for Workiva and FalconStor Software
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Workiva and FalconStor is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and FalconStor Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FalconStor Software 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 FalconStor Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FalconStor Software has no effect on the direction of Workiva i.e., Workiva and FalconStor Software go up and down completely randomly.
Pair Corralation between Workiva and FalconStor Software
Allowing for the 90-day total investment horizon Workiva is expected to under-perform the FalconStor Software. But the stock apears to be less risky and, when comparing its historical volatility, Workiva is 6.5 times less risky than FalconStor Software. The stock trades about -0.03 of its potential returns per unit of risk. The FalconStor Software is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 125.00 in FalconStor Software on January 25, 2024 and sell it today you would earn a total of 10.00 from holding FalconStor Software or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 56.14% |
| Values | Daily Returns |
Workiva vs. FalconStor Software
Performance |
| Timeline |
| Workiva |
| FalconStor Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Workiva and FalconStor Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workiva and FalconStor Software
The main advantage of trading using opposite Workiva and FalconStor Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva position performs unexpectedly, FalconStor Software 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 FalconStor Software will offset losses from the drop in FalconStor Software's long position.| Workiva vs. Clearwater Analytics Holdings | Workiva vs. Meridianlink | Workiva vs. Model N | Workiva vs. Bigcommerce HoldingsInc |
| FalconStor Software vs. JfrogLtd | FalconStor Software vs. Fastly Inc | FalconStor Software vs. Bill Com Holdings | FalconStor Software vs. AsanaInc |
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 the AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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