Correlation Between Workspace Group and Morgan Advanced

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

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

Diversification Opportunities for Workspace Group and Morgan Advanced

-0.52

Correlation Coefficient

Workspace Group  Morgan Advanced

Excellent diversification

The 3 months correlation between Workspace and Morgan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Workspace Group PLC and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials and Workspace Group 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 Workspace Group PLC are associated (or correlated) with Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Workspace Group i.e., Workspace Group and Morgan Advanced go up and down completely randomly.

Pair Corralation between Workspace Group and Morgan Advanced

Assuming the 90 days trading horizon Workspace Group PLC is expected to under-perform the Morgan Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Workspace Group PLC is 1.16 times less risky than Morgan Advanced. The stock trades about -0.05 of its potential returns per unit of risk. The Morgan Advanced Materials is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  18,200  in Morgan Advanced Materials on April 22, 2025 and sell it today you would earn a total of  4,750  from holding Morgan Advanced Materials or generate 26.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Workspace Group PLC  vs.  Morgan Advanced Materials

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Morgan Advanced Materials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Advanced Materials are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Morgan Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workspace Group and Morgan Advanced

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

The idea behind Workspace Group PLC and Morgan Advanced Materials 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.