Correlation Between Graftech International and Plug Power

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Graftech 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 Graftech 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 Graftech International and Plug Power, you can compare the effects of market volatilities on Graftech 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 Graftech International with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graftech International and Plug Power.

Diversification Opportunities for Graftech International and Plug Power

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Graftech and Plug Power is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Graftech International and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and Graftech 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 Graftech International 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 Graftech International i.e., Graftech International and Plug Power go up and down completely randomly.

Pair Corralation between Graftech International and Plug Power

Considering the 90-day investment horizon Graftech International is expected to under-perform the Plug Power. But the stock apears to be less risky and, when comparing its historical volatility, Graftech International is 1.73 times less risky than Plug Power. The stock trades about -0.22 of its potential returns per unit of risk. The Plug Power is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,657  in Plug Power on June 30, 2022 and sell it today you would earn a total of  515.00  from holding Plug Power or generate 31.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Graftech International  vs.  Plug Power

 Performance (%) 
       Timeline  
Graftech International 
Graftech Performance
0 of 100
Over the last 90 days Graftech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Graftech Price Channel

Plug Power 
Plug Power Performance
7 of 100
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 conflicting basic indicators, Plug Power exhibited solid returns over the last few months and may actually be approaching a breakup point.

Plug Power Price Channel

Graftech International and Plug Power Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Graftech International and Plug Power

The main advantage of trading using opposite Graftech International and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graftech 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.
Graftech International vs. Sunrun Inc
The idea behind Graftech International 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.
Plug Power vs. Sunrun Inc
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go