Correlation Between BetterU Education and Plug Power

Can any of the company-specific risk be diversified away by investing in both BetterU Education and Plug 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 BetterU Education and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between betterU Education Corp and Plug Power, you can compare the effects of market volatilities on BetterU Education and Plug 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 BetterU Education with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetterU Education and Plug Power.

Diversification Opportunities for BetterU Education and Plug Power

0.0

Correlation Coefficient

BetterU Education  Plug Power

Pay attention - limited upside

The 3 months correlation between BetterU and Plug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding betterU Education Corp and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and BetterU Education 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 betterU Education Corp are associated (or correlated) with Plug Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plug Power has no effect on the direction of BetterU Education i.e., BetterU Education and Plug Power go up and down completely randomly.

Pair Corralation between BetterU Education and Plug Power

If you would invest  191.00  in Plug Power on October 8, 2024 and sell it today you would earn a total of  48.00  from holding Plug Power or generate 25.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

betterU Education Corp  vs.  Plug Power

betterU Education Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days betterU Education Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BetterU Education is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Plug Power

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plug Power are ranked lower than 7 (%) 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.

Pair Trading with BetterU Education and Plug Power

The main advantage of trading using opposite BetterU Education and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetterU Education position performs unexpectedly, Plug 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 Plug Power will offset losses from the drop in Plug Power's long position.

The idea behind betterU Education Corp and Plug Power 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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.