Correlation Between Expion360 and Plug Power

Can any of the company-specific risk be diversified away by investing in both Expion360 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 Expion360 and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Expion360 and Plug Power, you can compare the effects of market volatilities on Expion360 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 Expion360 with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expion360 and Plug Power.

Diversification Opportunities for Expion360 and Plug Power

-0.27

Correlation Coefficient

Expion360  Plug Power

Very good diversification

The 3 months correlation between Expion360 and Plug is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Expion360 and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Expion360 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 Expion360 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 Expion360 i.e., Expion360 and Plug Power go up and down completely randomly.

Pair Corralation between Expion360 and Plug Power

Given the investment horizon of 90 days Expion360 is expected to under-perform the Plug Power. In addition to that, Expion360 is 2.16 times more volatile than Plug Power. It trades about -0.04 of its total potential returns per unit of risk. Plug Power is currently generating about 0.08 per unit of volatility. If you would invest  197.00  in Plug Power on September 16, 2024 and sell it today you would earn a total of  46.00  from holding Plug Power or generate 23.35% return on investment over 90 days.

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

Expion360  vs.  Plug Power

Expion360

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expion360 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Plug Power

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Plug Power are ranked lower than 6 (%) 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 Expion360 and Plug Power

The main advantage of trading using opposite Expion360 and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expion360 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 Expion360 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.