Correlation Between Bloom Energy and Ideanomics

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

Diversification Opportunities for Bloom Energy and Ideanomics

-0.09

Correlation Coefficient

Bloom Energy  Ideanomics

Good diversification

The 3 months correlation between Bloom and Ideanomics is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics 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 Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Bloom Energy i.e., Bloom Energy and Ideanomics go up and down completely randomly.

Pair Corralation between Bloom Energy and Ideanomics

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to under-perform the Ideanomics. But the stock apears to be less risky and, when comparing its historical volatility, Bloom Energy Corp is 58.19 times less risky than Ideanomics. The stock trades about 0.0 of its potential returns per unit of risk. The Ideanomics is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  0.36  in Ideanomics on December 29, 2024 and sell it today you would earn a total of  5.14  from holding Ideanomics or generate 1427.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.1%
Values	Daily Returns

Bloom Energy Corp  vs.  Ideanomics

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.

Ideanomics

Risk-Adjusted Performance

Very Strong

Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloom Energy and Ideanomics

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

The idea behind Bloom Energy Corp and Ideanomics 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.