Correlation Between Workhorse and Stellantis
Can any of the company-specific risk be diversified away by investing in both Workhorse and Stellantis 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 Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workhorse Group and Stellantis NV, you can compare the effects of market volatilities on Workhorse and Stellantis 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 Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workhorse and Stellantis.
Diversification Opportunities for Workhorse and Stellantis
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Workhorse and Stellantis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Workhorse Group and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV 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 Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Workhorse i.e., Workhorse and Stellantis go up and down completely randomly.
Pair Corralation between Workhorse and Stellantis
Given the investment horizon of 90 days Workhorse Group is expected to generate 8.01 times more return on investment than Stellantis. However, Workhorse is 8.01 times more volatile than Stellantis NV. It trades about 0.14 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.13 per unit of risk. 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 |
Workhorse Group vs. Stellantis NV
Performance |
| Timeline |
| Workhorse Group |
| Stellantis NV |
Workhorse and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workhorse and Stellantis
The main advantage of trading using opposite Workhorse and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workhorse position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Workhorse vs. Faraday Future Intelligent | Workhorse vs. Mullen Automotive | Workhorse vs. Xpeng Inc | Workhorse vs. Nio Class A |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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