Correlation Between Hyliion Holdings and Plug Power
Can any of the company-specific risk be diversified away by investing in both Hyliion Holdings 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 Hyliion Holdings and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyliion Holdings Corp and Plug Power, you can compare the effects of market volatilities on Hyliion Holdings 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 Hyliion Holdings with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyliion Holdings and Plug Power.
Diversification Opportunities for Hyliion Holdings and Plug Power
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyliion and Plug is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hyliion Holdings Corp and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Hyliion Holdings 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 Hyliion Holdings Corp 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 Hyliion Holdings i.e., Hyliion Holdings and Plug Power go up and down completely randomly.
Pair Corralation between Hyliion Holdings and Plug Power
Given the investment horizon of 90 days Hyliion Holdings Corp is expected to generate 1.12 times more return on investment than Plug Power. However, Hyliion Holdings is 1.12 times more volatile than Plug Power. It trades about 0.35 of its potential returns per unit of risk. Plug Power is currently generating about -0.03 per unit of risk. If you would invest 229.00 in Hyliion Holdings Corp on September 3, 2024 and sell it today you would earn a total of 140.00 from holding Hyliion Holdings Corp or generate 61.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyliion Holdings Corp vs. Plug Power
Performance |
| Timeline |
| Hyliion Holdings Corp |
| Plug Power |
Hyliion Holdings and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyliion Holdings and Plug Power
The main advantage of trading using opposite Hyliion Holdings and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyliion Holdings 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.| Hyliion Holdings vs. Quantumscape Corp | Hyliion Holdings vs. Mobileye Global Class | Hyliion Holdings vs. Innoviz Technologies | Hyliion Holdings vs. Aeva Technologies |
| Plug Power vs. Bloom Energy Corp | Plug Power vs. Microvast Holdings | Plug Power vs. Solid Power | Plug Power vs. CBAK Energy 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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