Correlation Between Plug Power and Enersys
Can any of the company-specific risk be diversified away by investing in both Plug Power and Enersys 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 Plug Power and Enersys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Enersys, you can compare the effects of market volatilities on Plug Power and Enersys 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 Plug Power with a short position of Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Enersys.
Diversification Opportunities for Plug Power and Enersys
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plug and Enersys is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys and Plug Power 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 Plug Power are associated (or correlated) with Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of Plug Power i.e., Plug Power and Enersys go up and down completely randomly.
Pair Corralation between Plug Power and Enersys
Given the investment horizon of 90 days Plug Power is expected to generate 3.3 times more return on investment than Enersys. However, Plug Power is 3.3 times more volatile than Enersys. It trades about 0.19 of its potential returns per unit of risk. Enersys is currently generating about -0.15 per unit of risk. If you would invest 197.00 in Plug Power on September 7, 2024 and sell it today you would earn a total of 48.00 from holding Plug Power or generate 24.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Plug Power vs. Enersys
Performance |
Timeline |
Plug Power |
Enersys |
Plug Power and Enersys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plug Power and Enersys
The main advantage of trading using opposite Plug Power and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.Plug Power vs. Bloom Energy Corp | Plug Power vs. Kimball Electronics | Plug Power vs. Elong Power Holding | Plug Power vs. Enovix Corp |
Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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