Correlation Between Impax Environmental and Plug Power
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Plug Power, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Plug Power.
Diversification Opportunities for Impax Environmental and Plug Power
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Impax and Plug is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Plug Power go up and down completely randomly.
Pair Corralation between Impax Environmental and Plug Power
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.1 times more return on investment than Plug Power. However, Impax Environmental Markets is 9.76 times less risky than Plug Power. It trades about 0.24 of its potential returns per unit of risk. Plug Power is currently generating about -0.08 per unit of risk. If you would invest 38,900 in Impax Environmental Markets on November 4, 2024 and sell it today you would earn a total of 1,800 from holding Impax Environmental Markets or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Plug Power
Performance |
| Timeline |
| Impax Environmental |
| Plug Power |
Impax Environmental and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Plug Power
The main advantage of trading using opposite Impax Environmental and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Cembra Money Bank | Impax Environmental vs. Synchrony Financial | Impax Environmental vs. Indutrade AB | Impax Environmental vs. Cars Inc |
| Plug Power vs. AMG Advanced Metallurgical | Plug Power vs. First Class Metals | Plug Power vs. Charter Communications Cl | Plug Power vs. Alien Metals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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