Correlation Between Bloom Energy and Core Main
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Core Main 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 Core Main 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 Core Main, you can compare the effects of market volatilities on Bloom Energy and Core Main 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 Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Core Main.
Diversification Opportunities for Bloom Energy and Core Main
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bloom and Core is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main 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 Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of Bloom Energy i.e., Bloom Energy and Core Main go up and down completely randomly.
Pair Corralation between Bloom Energy and Core Main
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 2.73 times more return on investment than Core Main. However, Bloom Energy is 2.73 times more volatile than Core Main. It trades about 0.13 of its potential returns per unit of risk. Core Main is currently generating about 0.08 per unit of risk. If you would invest 1,102 in Bloom Energy Corp on November 2, 2024 and sell it today you would earn a total of 1,250 from holding Bloom Energy Corp or generate 113.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloom Energy Corp vs. Core Main
Performance |
| Timeline |
| Bloom Energy Corp |
| Core Main |
Bloom Energy and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and Core Main
The main advantage of trading using opposite Bloom Energy and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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