Correlation Between Taylor Wimpey and Workspace Group

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

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

Diversification Opportunities for Taylor Wimpey and Workspace Group

0.18

Correlation Coefficient

Taylor Wimpey  Workspace Group

Average diversification

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

Pair Corralation between Taylor Wimpey and Workspace Group

Assuming the 90 days trading horizon Taylor Wimpey PLC is expected to under-perform the Workspace Group. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Wimpey PLC is 1.08 times less risky than Workspace Group. The stock trades about -0.04 of its potential returns per unit of risk. The Workspace Group PLC is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  41,713  in Workspace Group PLC on April 23, 2025 and sell it today you would lose (1,163) from holding Workspace Group PLC or give up 2.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Taylor Wimpey PLC  vs.  Workspace Group PLC

Taylor Wimpey PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Wimpey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Taylor Wimpey is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Workspace Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workspace Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Workspace Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Taylor Wimpey and Workspace Group

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

The idea behind Taylor Wimpey PLC and Workspace Group PLC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.