Correlation Between Blink Charging and Workhorse

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

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

Diversification Opportunities for Blink Charging and Workhorse

-0.36

Correlation Coefficient

Blink Charging  Workhorse

Very good diversification

The 3 months correlation between Blink and Workhorse is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Blink Charging Co and Workhorse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workhorse Group and Blink Charging 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 Blink Charging Co 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 Blink Charging i.e., Blink Charging and Workhorse go up and down completely randomly.

Pair Corralation between Blink Charging and Workhorse

Given the investment horizon of 90 days Blink Charging is expected to generate 16.21 times less return on investment than Workhorse. But when comparing it to its historical volatility, Blink Charging Co is 2.11 times less risky than Workhorse. It trades about 0.02 of its potential returns per unit of risk. Workhorse Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Workhorse Group on September 4, 2024 and sell it today you would earn a total of  42.00  from holding Workhorse Group or generate 67.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Blink Charging Co  vs.  Workhorse Group

Blink Charging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blink Charging Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Blink Charging is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Workhorse Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Workhorse Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical indicators, Workhorse unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blink Charging and Workhorse

The main advantage of trading using opposite Blink Charging and Workhorse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blink Charging 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 Blink Charging Co 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.