Correlation Between Bloom Energy and NeoVolta Common

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

Diversification Opportunities for Bloom Energy and NeoVolta Common

0.87

Correlation Coefficient

Bloom Energy  NeoVolta Common

Very poor diversification

The 3 months correlation between Bloom and NeoVolta is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and NeoVolta Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoVolta Common Stock 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 NeoVolta Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoVolta Common Stock has no effect on the direction of Bloom Energy i.e., Bloom Energy and NeoVolta Common go up and down completely randomly.

Pair Corralation between Bloom Energy and NeoVolta Common

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 1.58 times more return on investment than NeoVolta Common. However, Bloom Energy is 1.58 times more volatile than NeoVolta Common Stock. It trades about 0.18 of its potential returns per unit of risk. NeoVolta Common Stock is currently generating about 0.18 per unit of risk. If you would invest  1,191  in Bloom Energy Corp on August 30, 2024 and sell it today you would earn a total of  1,530  from holding Bloom Energy Corp or generate 128.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Bloom Energy Corp  vs.  NeoVolta Common Stock

Bloom Energy Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Bloom Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

NeoVolta Common Stock

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NeoVolta Common Stock are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NeoVolta Common showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloom Energy and NeoVolta Common

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

The idea behind Bloom Energy Corp and NeoVolta Common Stock 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.