Correlation Between Workhorse and SRIVARU Holding

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

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

Diversification Opportunities for Workhorse and SRIVARU Holding

0.28

Correlation Coefficient

Workhorse  SRIVARU Holding

Modest diversification

The 3 months correlation between Workhorse and SRIVARU is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Workhorse Group and SRIVARU Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRIVARU Holding 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 SRIVARU Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRIVARU Holding has no effect on the direction of Workhorse i.e., Workhorse and SRIVARU Holding go up and down completely randomly.

Pair Corralation between Workhorse and SRIVARU Holding

Given the investment horizon of 90 days Workhorse Group is expected to under-perform the SRIVARU Holding. But the stock apears to be less risky and, when comparing its historical volatility, Workhorse Group is 18.07 times less risky than SRIVARU Holding. The stock trades about -0.31 of its potential returns per unit of risk. The SRIVARU Holding Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3.34  in SRIVARU Holding Limited on December 30, 2024 and sell it today you would earn a total of  7.66  from holding SRIVARU Holding Limited or generate 229.34% return on investment over 90 days.

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

Workhorse Group  vs.  SRIVARU Holding Limited

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.

SRIVARU Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SRIVARU Holding Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting primary indicators, SRIVARU Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workhorse and SRIVARU Holding

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

The idea behind Workhorse Group and SRIVARU Holding Limited 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.