Correlation Between Bloom Energy and Blue Sphere
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Blue Sphere 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 Blue Sphere 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 Blue Sphere Corp, you can compare the effects of market volatilities on Bloom Energy and Blue Sphere 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 Blue Sphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Blue Sphere.
Diversification Opportunities for Bloom Energy and Blue Sphere
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bloom and Blue is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Blue Sphere Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sphere Corp 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 Blue Sphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sphere Corp has no effect on the direction of Bloom Energy i.e., Bloom Energy and Blue Sphere go up and down completely randomly.
Pair Corralation between Bloom Energy and Blue Sphere
Allowing for the 90-day total investment horizon Bloom Energy is expected to generate 368.1 times less return on investment than Blue Sphere. But when comparing it to its historical volatility, Bloom Energy Corp is 65.24 times less risky than Blue Sphere. It trades about 0.06 of its potential returns per unit of risk. Blue Sphere Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Blue Sphere Corp on November 15, 2024 and sell it today you would lose (0.01) from holding Blue Sphere Corp or give up 100.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.31% |
Values | Daily Returns |
Bloom Energy Corp vs. Blue Sphere Corp
Performance |
Timeline |
Bloom Energy Corp |
Blue Sphere Corp |
Bloom Energy and Blue Sphere Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bloom Energy and Blue Sphere
The main advantage of trading using opposite Bloom Energy and Blue Sphere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Blue Sphere 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 Blue Sphere will offset losses from the drop in Blue Sphere's long position.Bloom Energy vs. Plug Power | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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