Correlation Between NEW MILLENNIUM and Bloom Energy

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

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

Diversification Opportunities for NEW MILLENNIUM and Bloom Energy

0.38

Correlation Coefficient

NEW MILLENNIUM  Bloom Energy

Weak diversification

The 3 months correlation between NEW and Bloom is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with Bloom Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Energy has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and Bloom Energy go up and down completely randomly.

Pair Corralation between NEW MILLENNIUM and Bloom Energy

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to generate 1.63 times more return on investment than Bloom Energy. However, NEW MILLENNIUM is 1.63 times more volatile than Bloom Energy. It trades about 0.05 of its potential returns per unit of risk. Bloom Energy is currently generating about 0.03 per unit of risk. If you would invest  184.00  in NEW MILLENNIUM IRON on October 11, 2024 and sell it today you would earn a total of  616.00  from holding NEW MILLENNIUM IRON or generate 334.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

NEW MILLENNIUM IRON  vs.  Bloom Energy

NEW MILLENNIUM IRON

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NEW MILLENNIUM IRON are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, NEW MILLENNIUM may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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.

Pair Trading with NEW MILLENNIUM and Bloom Energy

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

The idea behind NEW MILLENNIUM IRON and Bloom Energy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..