Correlation Between Plug Power and Stingray

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

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

Diversification Opportunities for Plug Power and Stingray

-0.63

Correlation Coefficient

Plug Power  Stingray

Excellent diversification

The 3 months correlation between Plug and Stingray is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Plug Power i.e., Plug Power and Stingray go up and down completely randomly.

Pair Corralation between Plug Power and Stingray

Given the investment horizon of 90 days Plug Power is expected to under-perform the Stingray. In addition to that, Plug Power is 2.63 times more volatile than Stingray Group. It trades about -0.06 of its total potential returns per unit of risk. Stingray Group is currently generating about 0.09 per unit of volatility. If you would invest  561.00  in Stingray Group on November 28, 2024 and sell it today you would earn a total of  73.00  from holding Stingray Group or generate 13.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Plug Power  vs.  Stingray Group

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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Stingray Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stingray Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Stingray reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plug Power and Stingray

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

The idea behind Plug Power and Stingray Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.