Correlation Between Plug Power and Chardan NexTech
Can any of the company-specific risk be diversified away by investing in both Plug Power and Chardan NexTech 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 Plug Power and Chardan NexTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Chardan NexTech Acquisition, you can compare the effects of market volatilities on Plug Power and Chardan NexTech 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 Plug Power with a short position of Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Chardan NexTech.
Diversification Opportunities for Plug Power and Chardan NexTech
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plug and Chardan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu and Plug 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 Plug Power are associated (or correlated) with Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of Plug Power i.e., Plug Power and Chardan NexTech go up and down completely randomly.
Pair Corralation between Plug Power and Chardan NexTech
Given the investment horizon of 90 days Plug Power is expected to generate 0.87 times more return on investment than Chardan NexTech. However, Plug Power is 1.16 times less risky than Chardan NexTech. It trades about 0.03 of its potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.11 per unit of risk. If you would invest 224.00 in Plug Power on August 27, 2024 and sell it today you would lose (4.00) from holding Plug Power or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Chardan NexTech Acquisition
Performance |
| Timeline |
| Plug Power |
| Chardan NexTech Acqu |
Plug Power and Chardan NexTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Chardan NexTech
The main advantage of trading using opposite Plug Power and Chardan NexTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Chardan NexTech 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 Chardan NexTech will offset losses from the drop in Chardan NexTech's long position.| Plug Power vs. Bloom Energy Corp | Plug Power vs. Microvast Holdings | Plug Power vs. Solid Power | Plug Power vs. CBAK Energy Technology |
| Chardan NexTech vs. Polar Power | Chardan NexTech vs. Eos Energy Enterprises | Chardan NexTech vs. Sunrise New Energy | Chardan NexTech vs. AFC Energy plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |