Correlation Between Plug Power and Nxu
Can any of the company-specific risk be diversified away by investing in both Plug Power and Nxu 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 Nxu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Nxu Inc, you can compare the effects of market volatilities on Plug Power and Nxu 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 Nxu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Nxu.
Diversification Opportunities for Plug Power and Nxu
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plug and Nxu is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Nxu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nxu Inc 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 Nxu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nxu Inc has no effect on the direction of Plug Power i.e., Plug Power and Nxu go up and down completely randomly.
Pair Corralation between Plug Power and Nxu
Given the investment horizon of 90 days Plug Power is expected to generate 0.52 times more return on investment than Nxu. However, Plug Power is 1.91 times less risky than Nxu. It trades about -0.02 of its potential returns per unit of risk. Nxu Inc is currently generating about -0.02 per unit of risk. If you would invest 435.00 in Plug Power on September 3, 2024 and sell it today you would lose (211.00) from holding Plug Power or give up 48.51% 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. Nxu Inc
Performance |
| Timeline |
| Plug Power |
| Nxu Inc |
Plug Power and Nxu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Nxu
The main advantage of trading using opposite Plug Power and Nxu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Nxu 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 Nxu will offset losses from the drop in Nxu'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 |
| Nxu vs. Chardan NexTech Acquisition | Nxu vs. Polar Power | Nxu vs. Eos Energy Enterprises | Nxu 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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