Correlation Between Plug Power and Corus Entertainment

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

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

Diversification Opportunities for Plug Power and Corus Entertainment

0.53

Correlation Coefficient

Plug Power  Corus Entertainment

Very weak diversification

The 3 months correlation between Plug and Corus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment 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 Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Plug Power i.e., Plug Power and Corus Entertainment go up and down completely randomly.

Pair Corralation between Plug Power and Corus Entertainment

Given the investment horizon of 90 days Plug Power is expected to under-perform the Corus Entertainment. In addition to that, Plug Power is 1.3 times more volatile than Corus Entertainment. It trades about -0.04 of its total potential returns per unit of risk. Corus Entertainment is currently generating about -0.05 per unit of volatility. If you would invest  92.00  in Corus Entertainment on January 19, 2024 and sell it today you would lose (41.00) from holding Corus Entertainment or give up 44.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Plug Power  vs.  Corus Entertainment

Plug Power

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Plug Power are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Plug Power reported solid returns over the last few months and may actually be approaching a breakup point.

Corus Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Plug Power and Corus Entertainment

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

The idea behind Plug Power and Corus Entertainment 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 Anywhere module to track or share privately all of your investments from the convenience of any device.