Correlation Between Plug Power and Dow Jones
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By analyzing existing cross correlation between Plug Power and Dow Jones Industrial, you can compare the effects of market volatilities on Plug Power and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Dow Jones.
Diversification Opportunities for Plug Power and Dow Jones
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plug and Dow is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Plug Power i.e., Plug Power and Dow Jones go up and down completely randomly.
Pair Corralation between Plug Power and Dow Jones
Assuming the 90 days trading horizon Plug Power is expected to under-perform the Dow Jones. In addition to that, Plug Power is 8.41 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,389,102 in Dow Jones Industrial on October 28, 2024 and sell it today you would earn a total of 1,053,323 from holding Dow Jones Industrial or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Plug Power vs. Dow Jones Industrial
Performance |
| Timeline |
Plug Power and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Plug Power
Pair trading matchups for Plug Power
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Plug Power and Dow Jones
The main advantage of trading using opposite Plug Power and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Plug Power vs. UPDATE SOFTWARE | Plug Power vs. MGIC INVESTMENT | Plug Power vs. SEI INVESTMENTS | Plug Power vs. Keck Seng Investments |
| Dow Jones vs. Turning Point Brands | Dow Jones vs. Weyco Group | Dow Jones vs. Willamette Valley Vineyards | Dow Jones vs. Compania Cervecerias Unidas |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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