Correlation Between Orion Energy and Plug Power
Can any of the company-specific risk be diversified away by investing in both Orion Energy 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 Orion Energy and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Energy Systems and Plug Power, you can compare the effects of market volatilities on Orion Energy 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 Orion Energy with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Energy and Plug Power.
Diversification Opportunities for Orion Energy and Plug Power
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orion and Plug is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Orion Energy Systems and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Orion Energy 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 Orion Energy Systems 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 Orion Energy i.e., Orion Energy and Plug Power go up and down completely randomly.
Pair Corralation between Orion Energy and Plug Power
Given the investment horizon of 90 days Orion Energy Systems is expected to generate 0.61 times more return on investment than Plug Power. However, Orion Energy Systems is 1.63 times less risky than Plug Power. It trades about -0.04 of its potential returns per unit of risk. Plug Power is currently generating about -0.03 per unit of risk. If you would invest 219.00 in Orion Energy Systems on September 2, 2024 and sell it today you would lose (135.00) from holding Orion Energy Systems or give up 61.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Energy Systems vs. Plug Power
Performance |
| Timeline |
| Orion Energy Systems |
| Plug Power |
Orion Energy and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Energy and Plug Power
The main advantage of trading using opposite Orion Energy and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Energy 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.| Orion Energy vs. Polar Power | Orion Energy vs. CBAK Energy Technology | Orion Energy vs. Pioneer Power Solutions | Orion Energy vs. Lightbridge Corp |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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