Correlation Between Murata Manufacturing and Plug Power
Can any of the company-specific risk be diversified away by investing in both Murata Manufacturing 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 Murata Manufacturing and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murata Manufacturing Co and Plug Power, you can compare the effects of market volatilities on Murata Manufacturing 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 Murata Manufacturing with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murata Manufacturing and Plug Power.
Diversification Opportunities for Murata Manufacturing and Plug Power
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Murata and Plug is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Murata Manufacturing Co and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Murata Manufacturing 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 Murata Manufacturing Co 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 Murata Manufacturing i.e., Murata Manufacturing and Plug Power go up and down completely randomly.
Pair Corralation between Murata Manufacturing and Plug Power
Assuming the 90 days trading horizon Murata Manufacturing Co is expected to under-perform the Plug Power. But the stock apears to be less risky and, when comparing its historical volatility, Murata Manufacturing Co is 3.79 times less risky than Plug Power. The stock trades about -0.09 of its potential returns per unit of risk. The Plug Power is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Plug Power on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Plug Power or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murata Manufacturing Co vs. Plug Power
Performance |
| Timeline |
| Murata Manufacturing |
| Plug Power |
Murata Manufacturing and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murata Manufacturing and Plug Power
The main advantage of trading using opposite Murata Manufacturing and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murata Manufacturing 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.| Murata Manufacturing vs. Air Transport Services | Murata Manufacturing vs. Gaztransport Technigaz SA | Murata Manufacturing vs. SCIENCE IN SPORT | Murata Manufacturing vs. BII Railway Transportation |
| Plug Power vs. Murata Manufacturing Co | Plug Power vs. Corning Incorporated | Plug Power vs. TDK Corporation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |