Correlation Between Bloom Energy and China Natural
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and China Natural 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 Bloom Energy and China Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloom Energy Corp and China Natural Resources, you can compare the effects of market volatilities on Bloom Energy and China Natural 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 Bloom Energy with a short position of China Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and China Natural.
Diversification Opportunities for Bloom Energy and China Natural
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bloom and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and China Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Natural Resources and Bloom Energy 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 Bloom Energy Corp are associated (or correlated) with China Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Natural Resources has no effect on the direction of Bloom Energy i.e., Bloom Energy and China Natural go up and down completely randomly.
Pair Corralation between Bloom Energy and China Natural
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 2.16 times more return on investment than China Natural. However, Bloom Energy is 2.16 times more volatile than China Natural Resources. It trades about 0.24 of its potential returns per unit of risk. China Natural Resources is currently generating about -0.1 per unit of risk. If you would invest 1,046 in Bloom Energy Corp on September 13, 2024 and sell it today you would earn a total of 1,488 from holding Bloom Energy Corp or generate 142.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Bloom Energy Corp vs. China Natural Resources
Performance |
| Timeline |
| Bloom Energy Corp |
| China Natural Resources |
Bloom Energy and China Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and China Natural
The main advantage of trading using opposite Bloom Energy and China Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, China Natural 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 China Natural will offset losses from the drop in China Natural's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| China Natural vs. Seychelle Environmtl | China Natural vs. Vow ASA | China Natural vs. Eestech | China Natural vs. Energy and Water |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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