Correlation Between Bloom Energy and Radiant Logistics

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

Diversification Opportunities for Bloom Energy and Radiant Logistics

0.18

Correlation Coefficient

Bloom Energy  Radiant Logistics

Average diversification

The 3 months correlation between Bloom and Radiant is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Radiant Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Logistics 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 Radiant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Logistics has no effect on the direction of Bloom Energy i.e., Bloom Energy and Radiant Logistics go up and down completely randomly.

Pair Corralation between Bloom Energy and Radiant Logistics

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 2.51 times more return on investment than Radiant Logistics. However, Bloom Energy is 2.51 times more volatile than Radiant Logistics. It trades about 0.03 of its potential returns per unit of risk. Radiant Logistics is currently generating about -0.03 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 Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bloom Energy Corp  vs.  Radiant Logistics

Bloom Energy Corp

Risk-Adjusted Performance

Weak

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.

Radiant Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Radiant Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Radiant Logistics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bloom Energy and Radiant Logistics

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

The idea behind Bloom Energy Corp and Radiant Logistics 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.