Correlation Between CEOTRONICS and Bloom Energy

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

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

Diversification Opportunities for CEOTRONICS and Bloom Energy

0.62

Correlation Coefficient

CEOTRONICS  Bloom Energy

Poor diversification

The 3 months correlation between CEOTRONICS and Bloom is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS i.e., CEOTRONICS and Bloom Energy go up and down completely randomly.

Pair Corralation between CEOTRONICS and Bloom Energy

Assuming the 90 days trading horizon CEOTRONICS is expected to generate 14.84 times less return on investment than Bloom Energy. But when comparing it to its historical volatility, CEOTRONICS is 3.53 times less risky than Bloom Energy. It trades about 0.05 of its potential returns per unit of risk. Bloom Energy is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  911.00  in Bloom Energy on October 26, 2024 and sell it today you would earn a total of  1,879  from holding Bloom Energy or generate 206.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

CEOTRONICS  vs.  Bloom Energy

CEOTRONICS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CEOTRONICS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bloom Energy

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bloom Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEOTRONICS and Bloom Energy

The main advantage of trading using opposite CEOTRONICS and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS 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 CEOTRONICS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.