Correlation Between Plug Power and Hubbell
Can any of the company-specific risk be diversified away by investing in both Plug Power and Hubbell 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 Hubbell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Hubbell, you can compare the effects of market volatilities on Plug Power and Hubbell 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 Hubbell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Hubbell.
Diversification Opportunities for Plug Power and Hubbell
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Plug and Hubbell is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Hubbell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubbell 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 Hubbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubbell has no effect on the direction of Plug Power i.e., Plug Power and Hubbell go up and down completely randomly.
Pair Corralation between Plug Power and Hubbell
Given the investment horizon of 90 days Plug Power is expected to generate 3.47 times more return on investment than Hubbell. However, Plug Power is 3.47 times more volatile than Hubbell. It trades about 0.03 of its potential returns per unit of risk. Hubbell is currently generating about 0.07 per unit of risk. If you would invest 224.00 in Plug Power on August 28, 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. Hubbell
Performance |
| Timeline |
| Plug Power |
| Hubbell |
Plug Power and Hubbell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Hubbell
The main advantage of trading using opposite Plug Power and Hubbell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Hubbell 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 Hubbell will offset losses from the drop in Hubbell'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 |
| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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