Correlation Between Bloom Energy and CEOTRONICS (CEKSG)

Can any of the company-specific risk be diversified away by investing in both Bloom Energy and CEOTRONICS (CEKSG) 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 Bloom Energy and CEOTRONICS (CEKSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bloom Energy and CEOTRONICS, you can compare the effects of market volatilities on Bloom Energy and CEOTRONICS (CEKSG) 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 Bloom Energy with a short position of CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and CEOTRONICS (CEKSG).

Diversification Opportunities for Bloom Energy and CEOTRONICS (CEKSG)

0.55

Correlation Coefficient

Bloom Energy  CEOTRONICS (CEKSG)

Very weak diversification

The 3 months correlation between Bloom and CEOTRONICS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) and Bloom 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 Bloom Energy are associated (or correlated) with CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of Bloom Energy i.e., Bloom Energy and CEOTRONICS (CEKSG) go up and down completely randomly.

Pair Corralation between Bloom Energy and CEOTRONICS (CEKSG)

Assuming the 90 days horizon Bloom Energy is expected to generate 1.38 times more return on investment than CEOTRONICS (CEKSG). However, Bloom Energy is 1.38 times more volatile than CEOTRONICS. It trades about 0.16 of its potential returns per unit of risk. CEOTRONICS is currently generating about -0.21 per unit of risk. If you would invest  2,183  in Bloom Energy on October 11, 2024 and sell it today you would earn a total of  206.00  from holding Bloom Energy or generate 9.44% return on investment over 90 days.

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

Bloom Energy  vs.  CEOTRONICS

Bloom Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bloom Energy reported solid returns over the last few months and may actually be approaching a breakup point.

CEOTRONICS (CEKSG)

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CEOTRONICS (CEKSG) unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloom Energy and CEOTRONICS (CEKSG)

The main advantage of trading using opposite Bloom Energy and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.

The idea behind Bloom Energy and CEOTRONICS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.