Correlation Between Beam Global and Emeren

Can any of the company-specific risk be diversified away by investing in both Beam Global and Emeren 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 Beam Global and Emeren into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beam Global and Emeren Group, you can compare the effects of market volatilities on Beam Global and Emeren 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 Beam Global with a short position of Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Global and Emeren.

Diversification Opportunities for Beam Global and Emeren

0.88

Correlation Coefficient

Beam Global  Emeren

Very poor diversification

The 3 months correlation between Beam and Emeren is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Beam Global and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group and Beam Global 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 Beam Global are associated (or correlated) with Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Beam Global i.e., Beam Global and Emeren go up and down completely randomly.

Pair Corralation between Beam Global and Emeren

Given the investment horizon of 90 days Beam Global is expected to under-perform the Emeren. But the stock apears to be less risky and, when comparing its historical volatility, Beam Global is 1.2 times less risky than Emeren. The stock trades about -0.06 of its potential returns per unit of risk. The Emeren Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Emeren Group on December 24, 2024 and sell it today you would lose (42.00) from holding Emeren Group or give up 20.0% of portfolio value over 90 days.

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

Beam Global  vs.  Emeren Group

Beam Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beam Global 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Emeren Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emeren Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Beam Global and Emeren

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

The idea behind Beam Global and Emeren Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.