Correlation Between Workhorse and Canoo
Can any of the company-specific risk be diversified away by investing in both Workhorse and Canoo 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 Workhorse and Canoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workhorse Group and Canoo Inc, you can compare the effects of market volatilities on Workhorse and Canoo 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 Workhorse with a short position of Canoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workhorse and Canoo.
Diversification Opportunities for Workhorse and Canoo
Excellent diversification
The 3 months correlation between Workhorse and Canoo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Workhorse Group and Canoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo Inc and Workhorse 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 Workhorse Group are associated (or correlated) with Canoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Inc has no effect on the direction of Workhorse i.e., Workhorse and Canoo go up and down completely randomly.
Pair Corralation between Workhorse and Canoo
Given the investment horizon of 90 days Workhorse Group is expected to generate 1.14 times more return on investment than Canoo. However, Workhorse is 1.14 times more volatile than Canoo Inc. It trades about -0.09 of its potential returns per unit of risk. Canoo Inc is currently generating about -0.13 per unit of risk. If you would invest 421.00 in Workhorse Group on August 24, 2024 and sell it today you would lose (325.00) from holding Workhorse Group or give up 77.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workhorse Group vs. Canoo Inc
Performance |
| Timeline |
| Workhorse Group |
| Canoo Inc |
Workhorse and Canoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workhorse and Canoo
The main advantage of trading using opposite Workhorse and Canoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workhorse position performs unexpectedly, Canoo 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 Canoo will offset losses from the drop in Canoo's long position.| Workhorse vs. Faraday Future Intelligent | Workhorse vs. Mullen Automotive | Workhorse vs. Xpeng Inc | Workhorse vs. Nio Class A |
| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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