Correlation Between Plug Power and Tatton Asset
Can any of the company-specific risk be diversified away by investing in both Plug Power and Tatton Asset 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 Tatton Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Tatton Asset Management, you can compare the effects of market volatilities on Plug Power and Tatton Asset 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 Tatton Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Tatton Asset.
Diversification Opportunities for Plug Power and Tatton Asset
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plug and Tatton is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management 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 Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of Plug Power i.e., Plug Power and Tatton Asset go up and down completely randomly.
Pair Corralation between Plug Power and Tatton Asset
Assuming the 90 days trading horizon Plug Power is expected to generate 5.79 times more return on investment than Tatton Asset. However, Plug Power is 5.79 times more volatile than Tatton Asset Management. It trades about 0.17 of its potential returns per unit of risk. Tatton Asset Management is currently generating about -0.15 per unit of risk. If you would invest 198.00 in Plug Power on September 12, 2024 and sell it today you would earn a total of 49.00 from holding Plug Power or generate 24.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Tatton Asset Management
Performance |
| Timeline |
| Plug Power |
| Tatton Asset Management |
Plug Power and Tatton Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Tatton Asset
The main advantage of trading using opposite Plug Power and Tatton Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Tatton Asset 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 Tatton Asset will offset losses from the drop in Tatton Asset's long position.| Plug Power vs. Hilton Food Group | Plug Power vs. Roebuck Food Group | Plug Power vs. GoldMining | Plug Power vs. Cornish Metals |
| Tatton Asset vs. Bytes Technology | Tatton Asset vs. DXC Technology Co | Tatton Asset vs. Dalata Hotel Group | Tatton Asset vs. Sabien Technology Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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