Correlation Between BANK CENTRAL and Bloom Energy

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

By analyzing existing cross correlation between BANK CENTRAL ASIA and Bloom Energy, you can compare the effects of market volatilities on BANK CENTRAL and Bloom Energy 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 BANK CENTRAL with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and Bloom Energy.

Diversification Opportunities for BANK CENTRAL and Bloom Energy

0.32

Correlation Coefficient

BANK CENTRAL  Bloom Energy

Weak diversification

The 3 months correlation between BANK and Bloom is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with Bloom Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Energy has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and Bloom Energy go up and down completely randomly.

Pair Corralation between BANK CENTRAL and Bloom Energy

Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to under-perform the Bloom Energy. But the stock apears to be less risky and, when comparing its historical volatility, BANK CENTRAL ASIA is 4.5 times less risky than Bloom Energy. The stock trades about -0.21 of its potential returns per unit of risk. The Bloom Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,276  in Bloom Energy on December 26, 2024 and sell it today you would lose (34.00) from holding Bloom Energy or give up 1.49% of portfolio value over 90 days.

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

BANK CENTRAL ASIA  vs.  Bloom Energy

BANK CENTRAL ASIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bloom Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bloom Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BANK CENTRAL and Bloom Energy

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

The idea behind BANK CENTRAL ASIA and Bloom Energy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.