Correlation Between FuelCell Energy and Plug Power
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy 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 FuelCell Energy and Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Plug Power, you can compare the effects of market volatilities on FuelCell Energy 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 FuelCell Energy with a short position of Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Plug Power.
Diversification Opportunities for FuelCell Energy and Plug Power
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FuelCell and Plug is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power and FuelCell Energy 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 FuelCell Energy 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 FuelCell Energy i.e., FuelCell Energy and Plug Power go up and down completely randomly.
Pair Corralation between FuelCell Energy and Plug Power
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the Plug Power. But the stock apears to be less risky and, when comparing its historical volatility, FuelCell Energy is 1.04 times less risky than Plug Power. The stock trades about -0.05 of its potential returns per unit of risk. The Plug Power is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,061 in Plug Power on March 28, 2025 and sell it today you would lose (939.50) from holding Plug Power or give up 88.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FuelCell Energy vs. Plug Power
Performance |
| Timeline |
| FuelCell Energy |
| Plug Power |
FuelCell Energy and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Plug Power
The main advantage of trading using opposite FuelCell Energy and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy 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.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| Plug Power vs. Bloom Energy Corp | Plug Power vs. Microvast Holdings | Plug Power vs. Solid Power | Plug Power vs. CBAK Energy Technology |
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 the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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