Correlation Between Workhorse and Blink Charging

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

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

Diversification Opportunities for Workhorse and Blink Charging

0.89

Correlation Coefficient

Workhorse  Blink Charging

Very poor diversification

The 3 months correlation between Workhorse and Blink is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Workhorse Group and Blink Charging Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blink Charging 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 Blink Charging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blink Charging has no effect on the direction of Workhorse i.e., Workhorse and Blink Charging go up and down completely randomly.

Pair Corralation between Workhorse and Blink Charging

Given the investment horizon of 90 days Workhorse Group is expected to under-perform the Blink Charging. In addition to that, Workhorse is 1.57 times more volatile than Blink Charging Co. It trades about -0.31 of its total potential returns per unit of risk. Blink Charging Co is currently generating about -0.13 per unit of volatility. If you would invest  146.00  in Blink Charging Co on December 29, 2024 and sell it today you would lose (52.00) from holding Blink Charging Co or give up 35.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Workhorse Group  vs.  Blink Charging Co

Workhorse Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workhorse Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Blink Charging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blink Charging Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Workhorse and Blink Charging

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

The idea behind Workhorse Group and Blink Charging Co 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.