Correlation Between Plug Power and Alfen NV

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Can any of the company-specific risk be diversified away by investing in both Plug Power and Alfen NV 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 Alfen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Alfen NV, you can compare the effects of market volatilities on Plug Power and Alfen NV 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 Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Alfen NV.

Diversification Opportunities for Plug Power and Alfen NV

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Plug and Alfen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV 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 Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Plug Power i.e., Plug Power and Alfen NV go up and down completely randomly.

Pair Corralation between Plug Power and Alfen NV

Assuming the 90 days trading horizon Plug Power is expected to generate 2.76 times more return on investment than Alfen NV. However, Plug Power is 2.76 times more volatile than Alfen NV. It trades about 0.23 of its potential returns per unit of risk. Alfen NV is currently generating about -0.03 per unit of risk. If you would invest  187.00  in Plug Power on September 24, 2024 and sell it today you would earn a total of  57.00  from holding Plug Power or generate 30.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Plug Power  vs.  Alfen NV

 Performance 
       Timeline  
Plug Power 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Plug Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Plug Power exhibited solid returns over the last few months and may actually be approaching a breakup point.
Alfen NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Alfen NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Alfen NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Plug Power and Alfen NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plug Power and Alfen NV

The main advantage of trading using opposite Plug Power and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.
Plug Power vs. Delta Electronics Public
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Plug Power vs. OSRAM LICHT N
The idea behind Plug Power and Alfen NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Alfen NV vs. Delta Electronics Public
Alfen NV vs. YASKAWA ELEC UNSP
Alfen NV vs. Plug Power
Alfen NV vs. VERTIV HOLCL A
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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