Correlation Between Workhorse and Hyliion Holdings

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

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

Diversification Opportunities for Workhorse and Hyliion Holdings

0.93

Correlation Coefficient

Workhorse  Hyliion Holdings

Almost no diversification

The 3 months correlation between Workhorse and Hyliion is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Workhorse Group and Hyliion Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyliion Holdings Corp 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 Hyliion Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyliion Holdings Corp has no effect on the direction of Workhorse i.e., Workhorse and Hyliion Holdings go up and down completely randomly.

Pair Corralation between Workhorse and Hyliion Holdings

Given the investment horizon of 90 days Workhorse Group is expected to under-perform the Hyliion Holdings. In addition to that, Workhorse is 1.3 times more volatile than Hyliion Holdings Corp. It trades about -0.26 of its total potential returns per unit of risk. Hyliion Holdings Corp is currently generating about -0.27 per unit of volatility. If you would invest  335.00  in Hyliion Holdings Corp on December 1, 2024 and sell it today you would lose (166.00) from holding Hyliion Holdings Corp or give up 49.55% of portfolio value over 90 days.

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

Workhorse Group  vs.  Hyliion Holdings Corp

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 weak 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.

Hyliion Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyliion Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Workhorse and Hyliion Holdings

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

The idea behind Workhorse Group and Hyliion Holdings Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.