Correlation Between Nel ASA and Plug Power
Can any of the company-specific risk be diversified away by investing in both Nel ASA 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 Nel ASA and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nel ASA and Plug Power, you can compare the effects of market volatilities on Nel ASA 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 Nel ASA with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Plug Power.
Diversification Opportunities for Nel ASA and Plug Power
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nel and Plug is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Nel ASA 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 Nel ASA 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 Nel ASA i.e., Nel ASA and Plug Power go up and down completely randomly.
Pair Corralation between Nel ASA and Plug Power
Assuming the 90 days horizon Nel ASA is expected to under-perform the Plug Power. But the stock apears to be less risky and, when comparing its historical volatility, Nel ASA is 1.31 times less risky than Plug Power. The stock trades about -0.08 of its potential returns per unit of risk. The Plug Power is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Plug Power on November 3, 2024 and sell it today you would lose (12.00) from holding Plug Power or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nel ASA vs. Plug Power
Performance |
| Timeline |
| Nel ASA |
| Plug Power |
Nel ASA and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nel ASA and Plug Power
The main advantage of trading using opposite Nel ASA and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nel ASA 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.| Nel ASA vs. Powercell Sweden | Nel ASA vs. ITM Power Plc | Nel ASA vs. Ballard Power Systems | Nel ASA vs. Plug Power |
| Plug Power vs. Ballard Power Systems | Plug Power vs. Nel ASA | Plug Power vs. ITM Power Plc | Plug Power vs. Powercell Sweden |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |