Correlation Between Bloom Energy and Innodata

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

Diversification Opportunities for Bloom Energy and Innodata

0.19

Correlation Coefficient

Bloom Energy  Innodata

Average diversification

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

Pair Corralation between Bloom Energy and Innodata

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to under-perform the Innodata. But the stock apears to be less risky and, when comparing its historical volatility, Bloom Energy Corp is 1.34 times less risky than Innodata. The stock trades about 0.0 of its potential returns per unit of risk. The Innodata is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,209  in Innodata on December 29, 2024 and sell it today you would lose (470.00) from holding Innodata or give up 11.17% of portfolio value over 90 days.

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

Bloom Energy Corp  vs.  Innodata

Bloom Energy Corp

Risk-Adjusted Performance

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.

Innodata

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bloom Energy and Innodata

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

The idea behind Bloom Energy Corp and Innodata 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.