Correlation Between Plug Power and Eos Energy
Can any of the company-specific risk be diversified away by investing in both Plug Power and Eos Energy 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 Eos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Eos Energy Enterprises, you can compare the effects of market volatilities on Plug Power and Eos Energy 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 Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Eos Energy.
Diversification Opportunities for Plug Power and Eos Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plug and Eos is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises 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 Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of Plug Power i.e., Plug Power and Eos Energy go up and down completely randomly.
Pair Corralation between Plug Power and Eos Energy
Given the investment horizon of 90 days Plug Power is expected to under-perform the Eos Energy. But the stock apears to be less risky and, when comparing its historical volatility, Plug Power is 1.42 times less risky than Eos Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Eos Energy Enterprises is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Eos Energy Enterprises on August 24, 2024 and sell it today you would earn a total of 181.00 from holding Eos Energy Enterprises or generate 258.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Eos Energy Enterprises
Performance |
| Timeline |
| Plug Power |
| Eos Energy Enterprises |
Plug Power and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Eos Energy
The main advantage of trading using opposite Plug Power and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Eos Energy 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 Eos Energy will offset losses from the drop in Eos Energy'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 |
| Eos Energy vs. Bloom Energy Corp | Eos Energy vs. Kimball Electronics | Eos Energy vs. Enovix Corp | Eos Energy vs. Sunrise New Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |