Correlation Between Solidion Technology and Plug Power

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

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

Diversification Opportunities for Solidion Technology and Plug Power

0.06

Correlation Coefficient

Solidion Technology  Plug Power

Significant diversification

The 3 months correlation between Solidion and Plug is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Solidion Technology and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Solidion Technology 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 Solidion Technology 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 Solidion Technology i.e., Solidion Technology and Plug Power go up and down completely randomly.

Pair Corralation between Solidion Technology and Plug Power

Considering the 90-day investment horizon Solidion Technology is expected to generate 1.34 times more return on investment than Plug Power. However, Solidion Technology is 1.34 times more volatile than Plug Power. It trades about 0.09 of its potential returns per unit of risk. Plug Power is currently generating about 0.09 per unit of risk. If you would invest  31.00  in Solidion Technology on September 2, 2024 and sell it today you would earn a total of  10.00  from holding Solidion Technology or generate 32.26% return on investment over 90 days.

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

Solidion Technology  vs.  Plug Power

Solidion Technology

Risk-Adjusted Performance

7 of 100

OK

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

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. Despite nearly unsteady basic indicators, Plug Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solidion Technology and Plug Power

The main advantage of trading using opposite Solidion Technology and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solidion Technology 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 Solidion Technology 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.