Correlation Between Plug Power and Pioneer Power
Can any of the company-specific risk be diversified away by investing in both Plug Power and Pioneer 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 Plug Power and Pioneer Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Pioneer Power Solutions, you can compare the effects of market volatilities on Plug Power and Pioneer 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 Plug Power with a short position of Pioneer Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Pioneer Power.
Diversification Opportunities for Plug Power and Pioneer Power
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plug and Pioneer is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Pioneer Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Power Solutions 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 Pioneer Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Power Solutions has no effect on the direction of Plug Power i.e., Plug Power and Pioneer Power go up and down completely randomly.
Pair Corralation between Plug Power and Pioneer Power
Given the investment horizon of 90 days Plug Power is expected to under-perform the Pioneer Power. In addition to that, Plug Power is 1.39 times more volatile than Pioneer Power Solutions. It trades about -0.05 of its total potential returns per unit of risk. Pioneer Power Solutions is currently generating about 0.1 per unit of volatility. If you would invest 416.00 in Pioneer Power Solutions on August 24, 2024 and sell it today you would earn a total of 202.00 from holding Pioneer Power Solutions or generate 48.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Pioneer Power Solutions
Performance |
| Timeline |
| Plug Power |
| Pioneer Power Solutions |
Plug Power and Pioneer Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Pioneer Power
The main advantage of trading using opposite Plug Power and Pioneer Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Pioneer 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 Pioneer Power will offset losses from the drop in Pioneer Power'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 |
| Pioneer Power vs. CBAK Energy Technology | Pioneer Power vs. Ocean Power Technologies | Pioneer Power vs. Ideal Power | Pioneer Power vs. Expion360 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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