Correlation Between Bloom Energy and Eos Energy

Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Eos 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 Bloom Energy and Eos Energy 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 Eos Energy Enterprises, you can compare the effects of market volatilities on Bloom Energy and Eos 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 Bloom Energy with a short position of Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Eos Energy.

Diversification Opportunities for Bloom Energy and Eos Energy

0.32

Correlation Coefficient

Bloom Energy  Eos Energy

Weak diversification

The 3 months correlation between Bloom and Eos is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises 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 Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of Bloom Energy i.e., Bloom Energy and Eos Energy go up and down completely randomly.

Pair Corralation between Bloom Energy and Eos Energy

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 0.82 times more return on investment than Eos Energy. However, Bloom Energy Corp is 1.22 times less risky than Eos Energy. It trades about 0.0 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about -0.02 per unit of risk. If you would invest  2,433  in Bloom Energy Corp on December 26, 2024 and sell it today you would lose (205.00) from holding Bloom Energy Corp or give up 8.43% of portfolio value over 90 days.

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

Bloom Energy Corp  vs.  Eos Energy Enterprises

Bloom Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bloom Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bloom Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Eos Energy Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eos Energy Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bloom Energy and Eos Energy

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

The idea behind Bloom Energy Corp and Eos Energy Enterprises 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.