Correlation Between Gamma Communications and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and Bloom Energy, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Bloom Energy.
Diversification Opportunities for Gamma Communications and Bloom Energy
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gamma and Bloom is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and Gamma Communications 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 Gamma Communications plc 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 Gamma Communications i.e., Gamma Communications and Bloom Energy go up and down completely randomly.
Pair Corralation between Gamma Communications and Bloom Energy
Assuming the 90 days horizon Gamma Communications is expected to generate 2.05 times less return on investment than Bloom Energy. But when comparing it to its historical volatility, Gamma Communications plc is 2.95 times less risky than Bloom Energy. It trades about 0.1 of its potential returns per unit of risk. Bloom Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,289 in Bloom Energy on September 2, 2024 and sell it today you would earn a total of 1,280 from holding Bloom Energy or generate 99.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. Bloom Energy
Performance |
| Timeline |
| Gamma Communications plc |
| Bloom Energy |
Gamma Communications and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Bloom Energy
The main advantage of trading using opposite Gamma Communications and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. BJs Wholesale Club | Gamma Communications vs. ARDAGH METAL PACDL 0001 | Gamma Communications vs. Lendlease Group | Gamma Communications vs. PARKEN Sport Entertainment |
| Bloom Energy vs. SPORTING | Bloom Energy vs. PARKEN Sport Entertainment | Bloom Energy vs. STRAYER EDUCATION | Bloom Energy vs. SCIENCE IN SPORT |
Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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