Correlation Between Leroy Seafood and Plug Power
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Plug Power 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 Leroy Seafood and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Plug Power, you can compare the effects of market volatilities on Leroy Seafood and Plug Power 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 Leroy Seafood with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Plug Power.
Diversification Opportunities for Leroy Seafood and Plug Power
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leroy and Plug is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with Plug Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plug Power has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Plug Power go up and down completely randomly.
Pair Corralation between Leroy Seafood and Plug Power
Assuming the 90 days trading horizon Leroy Seafood Group is expected to generate 0.13 times more return on investment than Plug Power. However, Leroy Seafood Group is 7.91 times less risky than Plug Power. It trades about 0.41 of its potential returns per unit of risk. Plug Power is currently generating about 0.0 per unit of risk. If you would invest 4,888 in Leroy Seafood Group on October 25, 2024 and sell it today you would earn a total of 445.00 from holding Leroy Seafood Group or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. Plug Power
Performance |
| Timeline |
| Leroy Seafood Group |
| Plug Power |
Leroy Seafood and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Plug Power
The main advantage of trading using opposite Leroy Seafood and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Plug Power 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 Plug Power will offset losses from the drop in Plug Power's long position.| Leroy Seafood vs. Toyota Motor Corp | Leroy Seafood vs. SoftBank Group Corp | Leroy Seafood vs. OTP Bank Nyrt | Leroy Seafood vs. ONEOK Inc |
| Plug Power vs. Home Depot | Plug Power vs. Take Two Interactive Software | Plug Power vs. DFS Furniture PLC | Plug Power vs. Impax Environmental Markets |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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