Correlation Between Worksport and Sypris Solutions

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

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

Diversification Opportunities for Worksport and Sypris Solutions

-0.76

Correlation Coefficient

Worksport  Sypris Solutions

Pay attention - limited upside

The 3 months correlation between Worksport and Sypris is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Worksport and Sypris Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sypris Solutions and Worksport 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 Worksport are associated (or correlated) with Sypris Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sypris Solutions has no effect on the direction of Worksport i.e., Worksport and Sypris Solutions go up and down completely randomly.

Pair Corralation between Worksport and Sypris Solutions

Given the investment horizon of 90 days Worksport is expected to generate 3.37 times more return on investment than Sypris Solutions. However, Worksport is 3.37 times more volatile than Sypris Solutions. It trades about 0.04 of its potential returns per unit of risk. Sypris Solutions is currently generating about 0.05 per unit of risk. If you would invest  59.00  in Worksport on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Worksport or generate 1.69% return on investment over 90 days.

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

Worksport  vs.  Sypris Solutions

Worksport

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Worksport are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Worksport reported solid returns over the last few months and may actually be approaching a breakup point.

Sypris Solutions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sypris Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Sypris Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Worksport and Sypris Solutions

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

The idea behind Worksport and Sypris Solutions 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.