Correlation Between Enersys and Bloom Energy

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

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

Diversification Opportunities for Enersys and Bloom Energy

0.21

Correlation Coefficient

Enersys  Bloom Energy

Modest diversification

The 3 months correlation between Enersys and Bloom is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Bloom Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy Corp and Enersys 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 Enersys 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 Corp has no effect on the direction of Enersys i.e., Enersys and Bloom Energy go up and down completely randomly.

Pair Corralation between Enersys and Bloom Energy

Considering the 90-day investment horizon Enersys is expected to generate 2.7 times less return on investment than Bloom Energy. But when comparing it to its historical volatility, Enersys is 3.37 times less risky than Bloom Energy. It trades about 0.03 of its potential returns per unit of risk. Bloom Energy Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Enersys  vs.  Bloom Energy Corp

Enersys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enersys are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enersys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Enersys and Bloom Energy

The main advantage of trading using opposite Enersys and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys 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 Enersys and Bloom Energy Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.