Correlation Between Dow Jones and Plug Power
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By analyzing existing cross correlation between Dow Jones Industrial and Plug Power, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Plug Power.
Diversification Opportunities for Dow Jones and Plug Power
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Plug is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Plug Power go up and down completely randomly.
Pair Corralation between Dow Jones and Plug Power
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Plug Power. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 9.84 times less risky than Plug Power. The index trades about -0.27 of its potential returns per unit of risk. The Plug Power is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 234.00 in Plug Power on October 13, 2024 and sell it today you would earn a total of 17.00 from holding Plug Power or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Plug Power
Performance |
| Timeline |
Dow Jones and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Plug Power
Pair trading matchups for Plug Power
Pair Trading with Dow Jones and Plug Power
The main advantage of trading using opposite Dow Jones and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Lululemon Athletica | Dow Jones vs. Vistra Energy Corp | Dow Jones vs. The Gap, | Dow Jones vs. Pool Corporation |
| Plug Power vs. Singapore Airlines Limited | Plug Power vs. Keck Seng Investments | Plug Power vs. AGNC INVESTMENT | Plug Power vs. Gol Intelligent Airlines |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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