Correlation Between ITM Power and Plug Power
Can any of the company-specific risk be diversified away by investing in both ITM Power 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 ITM Power and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Power Plc and Plug Power, you can compare the effects of market volatilities on ITM Power 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 ITM Power with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Power and Plug Power.
Diversification Opportunities for ITM Power and Plug Power
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITM and Plug is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ITM Power Plc and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and ITM Power 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 ITM Power Plc 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 ITM Power i.e., ITM Power and Plug Power go up and down completely randomly.
Pair Corralation between ITM Power and Plug Power
Assuming the 90 days horizon ITM Power Plc is expected to generate 0.9 times more return on investment than Plug Power. However, ITM Power Plc is 1.11 times less risky than Plug Power. It trades about -0.05 of its potential returns per unit of risk. Plug Power is currently generating about -0.05 per unit of risk. If you would invest 62.00 in ITM Power Plc on August 25, 2024 and sell it today you would lose (23.00) from holding ITM Power Plc or give up 37.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Power Plc vs. Plug Power
Performance |
| Timeline |
| ITM Power Plc |
| Plug Power |
ITM Power and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Power and Plug Power
The main advantage of trading using opposite ITM Power and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Power 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.| ITM Power vs. Amphenol | ITM Power vs. Hon Hai Precision | ITM Power vs. Samsung SDI Co | ITM Power vs. Corning Incorporated |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |