Correlation Between Plug Power and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both Plug Power and Corning Incorporated 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 Corning Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Corning Incorporated, you can compare the effects of market volatilities on Plug Power and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Corning Incorporated.
Diversification Opportunities for Plug Power and Corning Incorporated
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plug and Corning is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Plug Power i.e., Plug Power and Corning Incorporated go up and down completely randomly.
Pair Corralation between Plug Power and Corning Incorporated
Assuming the 90 days trading horizon Plug Power is expected to under-perform the Corning Incorporated. In addition to that, Plug Power is 1.88 times more volatile than Corning Incorporated. It trades about -0.26 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.15 per unit of volatility. If you would invest 4,700 in Corning Incorporated on November 27, 2024 and sell it today you would earn a total of 270.00 from holding Corning Incorporated or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Corning Incorporated
Performance |
| Timeline |
| Plug Power |
| Corning Incorporated |
Plug Power and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Corning Incorporated
The main advantage of trading using opposite Plug Power and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| Plug Power vs. Ballard Power Systems | Plug Power vs. Nel ASA | Plug Power vs. ITM Power Plc | Plug Power vs. Powercell Sweden |
| Corning Incorporated vs. STMICROELECTRONICS | Corning Incorporated vs. UMC Electronics Co | Corning Incorporated vs. MUTUIONLINE | Corning Incorporated vs. GungHo Online Entertainment |
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.
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