Correlation Between Workiva and Fastly

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

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

Diversification Opportunities for Workiva and Fastly

0.18

Correlation Coefficient

Workiva  Fastly

Average diversification

The 3 months correlation between Workiva and Fastly is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and Fastly Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc 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 Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc has no effect on the direction of Workiva i.e., Workiva and Fastly go up and down completely randomly.

Pair Corralation between Workiva and Fastly

Assuming the 90 days trading horizon Workiva is expected to generate 20.09 times less return on investment than Fastly. But when comparing it to its historical volatility, Workiva is 1.98 times less risky than Fastly. It trades about 0.01 of its potential returns per unit of risk. Fastly Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  466.00  in Fastly Inc on April 22, 2025 and sell it today you would earn a total of  139.00  from holding Fastly Inc or generate 29.83% return on investment over 90 days.

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

Workiva  vs.  Fastly Inc

Workiva

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workiva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Workiva is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fastly Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fastly Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Fastly unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workiva and Fastly

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

The idea behind Workiva and Fastly Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.