Correlation Between Corning Incorporated and Plug Power
Can any of the company-specific risk be diversified away by investing in both Corning Incorporated 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 Corning Incorporated and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corning Incorporated and Plug Power, you can compare the effects of market volatilities on Corning Incorporated 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 Corning Incorporated with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Plug Power.
Diversification Opportunities for Corning Incorporated and Plug Power
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corning and Plug is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated i.e., Corning Incorporated and Plug Power go up and down completely randomly.
Pair Corralation between Corning Incorporated and Plug Power
Assuming the 90 days horizon Corning Incorporated is expected to generate 0.36 times more return on investment than Plug Power. However, Corning Incorporated is 2.81 times less risky than Plug Power. It trades about 0.13 of its potential returns per unit of risk. Plug Power is currently generating about 0.01 per unit of risk. If you would invest 4,258 in Corning Incorporated on August 29, 2024 and sell it today you would earn a total of 319.00 from holding Corning Incorporated or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corning Incorporated vs. Plug Power
Performance |
| Timeline |
| Corning Incorporated |
| Plug Power |
Corning Incorporated and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corning Incorporated and Plug Power
The main advantage of trading using opposite Corning Incorporated and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated 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.| Corning Incorporated vs. WIZZ AIR HLDGUNSPADR4 | Corning Incorporated vs. FUTURE GAMING GRP | Corning Incorporated vs. Games Workshop Group | Corning Incorporated vs. ALTAIR RES INC |
| Plug Power vs. Hon Hai Precision | Plug Power vs. Corning Incorporated | Plug Power vs. Sunny Optical Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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