Correlation Between Bloom Energy and Asia Pacific

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

By analyzing existing cross correlation between Bloom Energy Corp and Asia Pacific Wire, you can compare the effects of market volatilities on Bloom Energy and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Asia Pacific.

Diversification Opportunities for Bloom Energy and Asia Pacific

0.19

Correlation Coefficient

Bloom Energy  Asia Pacific

Average diversification

The 3 months correlation between Bloom and Asia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Asia Pacific Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Wire 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 Corp are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Wire has no effect on the direction of Bloom Energy i.e., Bloom Energy and Asia Pacific go up and down completely randomly.

Pair Corralation between Bloom Energy and Asia Pacific

Allowing for the 90-day total investment horizon Bloom Energy is expected to generate 1.55 times less return on investment than Asia Pacific. In addition to that, Bloom Energy is 1.26 times more volatile than Asia Pacific Wire. It trades about 0.02 of its total potential returns per unit of risk. Asia Pacific Wire is currently generating about 0.04 per unit of volatility. If you would invest  145.00  in Asia Pacific Wire on December 27, 2024 and sell it today you would earn a total of  7.00  from holding Asia Pacific Wire or generate 4.83% return on investment over 90 days.

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

Bloom Energy Corp  vs.  Asia Pacific Wire

Bloom Energy Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Bloom Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Asia Pacific Wire

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pacific Wire are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Asia Pacific may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bloom Energy and Asia Pacific

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

The idea behind Bloom Energy Corp and Asia Pacific Wire 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.