Correlation Between AYRO and Workhorse
Can any of the company-specific risk be diversified away by investing in both AYRO and Workhorse 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 AYRO and Workhorse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AYRO Inc and Workhorse Group, you can compare the effects of market volatilities on AYRO and Workhorse 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 AYRO with a short position of Workhorse. Check out your portfolio center. Please also check ongoing floating volatility patterns of AYRO and Workhorse.
Diversification Opportunities for AYRO and Workhorse
Very good diversification
The 3 months correlation between AYRO and Workhorse is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AYRO Inc and Workhorse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workhorse Group and AYRO 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 AYRO Inc are associated (or correlated) with Workhorse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workhorse Group has no effect on the direction of AYRO i.e., AYRO and Workhorse go up and down completely randomly.
Pair Corralation between AYRO and Workhorse
Given the investment horizon of 90 days AYRO Inc is expected to under-perform the Workhorse. But the stock apears to be less risky and, when comparing its historical volatility, AYRO Inc is 6.41 times less risky than Workhorse. The stock trades about -0.13 of its potential returns per unit of risk. The Workhorse Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Workhorse Group on August 27, 2024 and sell it today you would earn a total of 24.00 from holding Workhorse Group or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AYRO Inc vs. Workhorse Group
Performance |
| Timeline |
| AYRO Inc |
| Workhorse Group |
AYRO and Workhorse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AYRO and Workhorse
The main advantage of trading using opposite AYRO and Workhorse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AYRO position performs unexpectedly, Workhorse 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 Workhorse will offset losses from the drop in Workhorse's long position.The idea behind AYRO Inc and Workhorse Group 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.| Workhorse vs. Faraday Future Intelligent | Workhorse vs. Mullen Automotive | Workhorse vs. Xpeng Inc | Workhorse vs. Nio Class A |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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