Correlation Between Primary Health and Plug Power
Can any of the company-specific risk be diversified away by investing in both Primary Health 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 Primary Health and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primary Health Properties and Plug Power, you can compare the effects of market volatilities on Primary Health 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 Primary Health with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primary Health and Plug Power.
Diversification Opportunities for Primary Health and Plug Power
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Primary and Plug is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Primary Health 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 Primary Health Properties 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 Primary Health i.e., Primary Health and Plug Power go up and down completely randomly.
Pair Corralation between Primary Health and Plug Power
Assuming the 90 days trading horizon Primary Health Properties is expected to under-perform the Plug Power. But the stock apears to be less risky and, when comparing its historical volatility, Primary Health Properties is 7.48 times less risky than Plug Power. The stock trades about -0.1 of its potential returns per unit of risk. The Plug Power is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Plug Power on October 25, 2024 and sell it today you would lose (18.00) from holding Plug Power or give up 7.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Primary Health Properties vs. Plug Power
Performance |
| Timeline |
| Primary Health Properties |
| Plug Power |
Primary Health and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primary Health and Plug Power
The main advantage of trading using opposite Primary Health and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primary Health 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.| Primary Health vs. Monks Investment Trust | Primary Health vs. Mobius Investment Trust | Primary Health vs. EJF Investments | Primary Health vs. Omega Healthcare Investors |
| Plug Power vs. Home Depot | Plug Power vs. Take Two Interactive Software | Plug Power vs. DFS Furniture PLC | Plug Power vs. Impax Environmental Markets |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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