Correlation Between Bloom Energy and Pioneer Power

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

Diversification Opportunities for Bloom Energy and Pioneer Power

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Bloom and Pioneer is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Pioneer Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Power Solutions 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 Pioneer Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Power Solutions has no effect on the direction of Bloom Energy i.e., Bloom Energy and Pioneer Power go up and down completely randomly.

Pair Corralation between Bloom Energy and Pioneer Power

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 1.92 times more return on investment than Pioneer Power. However, Bloom Energy is 1.92 times more volatile than Pioneer Power Solutions. It trades about 0.03 of its potential returns per unit of risk. Pioneer Power Solutions is currently generating about -0.15 per unit of risk. If you would invest  2,251  in Bloom Energy Corp on December 28, 2024 and sell it today you would lose (23.00) from holding Bloom Energy Corp or give up 1.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bloom Energy Corp  vs.  Pioneer Power Solutions

 Performance 
       Timeline  
Bloom Energy Corp 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Bloom Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.
Pioneer Power Solutions 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pioneer Power Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bloom Energy and Pioneer Power Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bloom Energy and Pioneer Power

The main advantage of trading using opposite Bloom Energy and Pioneer Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Pioneer Power 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 Pioneer Power will offset losses from the drop in Pioneer Power's long position.
The idea behind Bloom Energy Corp and Pioneer Power Solutions 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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