Correlation Between Bloom Energy and Joby Aviation

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

Diversification Opportunities for Bloom Energy and Joby Aviation

0.19

Correlation Coefficient

Bloom Energy  Joby Aviation

Average diversification

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

Pair Corralation between Bloom Energy and Joby Aviation

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 1.0 times more return on investment than Joby Aviation. However, Bloom Energy Corp is 1.0 times less risky than Joby Aviation. It trades about -0.03 of its potential returns per unit of risk. Joby Aviation is currently generating about -0.05 per unit of risk. If you would invest  2,745  in Bloom Energy Corp on November 29, 2024 and sell it today you would lose (445.00) from holding Bloom Energy Corp or give up 16.21% 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.  Joby Aviation

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 latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Joby Aviation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Joby Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bloom Energy and Joby Aviation

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

The idea behind Bloom Energy Corp and Joby Aviation 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.