Correlation Between Boeing and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Boeing 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 Boeing and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Bloom Energy Corp, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Bloom Energy.
Diversification Opportunities for Boeing and Bloom Energy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Bloom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing 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 Boeing 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 The Boeing 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 Boeing i.e., Boeing and Bloom Energy go up and down completely randomly.
Pair Corralation between Boeing and Bloom Energy
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Bloom Energy. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 5.93 times less risky than Bloom Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Bloom Energy Corp is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Bloom Energy Corp on August 31, 2024 and sell it today you would earn a total of 1,711 from holding Bloom Energy Corp or generate 169.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Bloom Energy Corp
Performance |
| Timeline |
| Boeing |
| Bloom Energy Corp |
Boeing and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Bloom Energy
The main advantage of trading using opposite Boeing and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| Bloom Energy vs. Plug Power | Bloom Energy vs. FREYR Battery SA | Bloom Energy vs. FuelCell Energy | Bloom Energy vs. Enovix Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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