Correlation Between Bloom Energy and 374Water Common

Can any of the company-specific risk be diversified away by investing in both Bloom Energy and 374Water 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 374Water 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 374Water Common Stock, you can compare the effects of market volatilities on Bloom Energy and 374Water 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 374Water Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and 374Water Common.

Diversification Opportunities for Bloom Energy and 374Water Common

0.28

Correlation Coefficient

Bloom Energy  374Water Common

Modest diversification

The 3 months correlation between Bloom and 374Water is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and 374Water Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 374Water 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 374Water Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 374Water Common Stock has no effect on the direction of Bloom Energy i.e., Bloom Energy and 374Water Common go up and down completely randomly.

Pair Corralation between Bloom Energy and 374Water Common

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 0.94 times more return on investment than 374Water Common. However, Bloom Energy Corp is 1.06 times less risky than 374Water Common. It trades about 0.03 of its potential returns per unit of risk. 374Water Common Stock is currently generating about -0.05 per unit of risk. If you would invest  2,123  in Bloom Energy Corp on November 28, 2024 and sell it today you would earn a total of  74.00  from holding Bloom Energy Corp or generate 3.49% return on investment over 90 days.

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

Bloom Energy Corp  vs.  374Water Common Stock

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

374Water Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days 374Water Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bloom Energy and 374Water Common

The main advantage of trading using opposite Bloom Energy and 374Water Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, 374Water 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 374Water Common will offset losses from the drop in 374Water Common's long position.

The idea behind Bloom Energy Corp and 374Water 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.