Correlation Between YAOKO and Plug Power
Can any of the company-specific risk be diversified away by investing in both YAOKO 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 YAOKO and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YAOKO LTD and Plug Power, you can compare the effects of market volatilities on YAOKO 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 YAOKO with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of YAOKO and Plug Power.
Diversification Opportunities for YAOKO and Plug Power
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YAOKO and Plug is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding YAOKO LTD and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and YAOKO 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 YAOKO LTD 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 YAOKO i.e., YAOKO and Plug Power go up and down completely randomly.
Pair Corralation between YAOKO and Plug Power
Assuming the 90 days horizon YAOKO is expected to generate 4.72 times less return on investment than Plug Power. But when comparing it to its historical volatility, YAOKO LTD is 5.27 times less risky than Plug Power. It trades about 0.14 of its potential returns per unit of risk. Plug Power is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Plug Power on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Plug Power or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
YAOKO LTD vs. Plug Power
Performance |
| Timeline |
| YAOKO LTD |
| Plug Power |
YAOKO and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YAOKO and Plug Power
The main advantage of trading using opposite YAOKO and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YAOKO 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.| YAOKO vs. Zijin Mining Group | YAOKO vs. GRIFFIN MINING LTD | YAOKO vs. Geely Automobile Holdings | YAOKO vs. Cars Inc |
| Plug Power vs. Murata Manufacturing Co | Plug Power vs. Corning Incorporated | Plug Power vs. TDK Corporation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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