Correlation Between Atkore International and Plug Power

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

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

Diversification Opportunities for Atkore International and Plug Power

0.82

Correlation Coefficient

Atkore International  Plug Power

Very poor diversification

The 3 months correlation between Atkore and Plug is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Atkore International Group and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Atkore International 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 Atkore International Group 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 Atkore International i.e., Atkore International and Plug Power go up and down completely randomly.

Pair Corralation between Atkore International and Plug Power

Given the investment horizon of 90 days Atkore International Group is expected to generate 0.63 times more return on investment than Plug Power. However, Atkore International Group is 1.59 times less risky than Plug Power. It trades about -0.11 of its potential returns per unit of risk. Plug Power is currently generating about -0.12 per unit of risk. If you would invest  8,300  in Atkore International Group on December 27, 2024 and sell it today you would lose (2,067) from holding Atkore International Group or give up 24.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Atkore International Group  vs.  Plug Power

Atkore International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atkore International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Plug Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plug Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Atkore International and Plug Power

The main advantage of trading using opposite Atkore International and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atkore International 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 Atkore International Group 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.