Correlation Between Bloom Energy and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and FuelCell 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 Bloom Energy and FuelCell Energy 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 FuelCell Energy, you can compare the effects of market volatilities on Bloom Energy and FuelCell 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 Bloom Energy with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and FuelCell Energy.
Diversification Opportunities for Bloom Energy and FuelCell Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bloom and FuelCell is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Bloom Energy i.e., Bloom Energy and FuelCell Energy go up and down completely randomly.
Pair Corralation between Bloom Energy and FuelCell Energy
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 0.89 times more return on investment than FuelCell Energy. However, Bloom Energy Corp is 1.13 times less risky than FuelCell Energy. It trades about 0.03 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.06 per unit of risk. If you would invest 2,013 in Bloom Energy Corp on August 27, 2024 and sell it today you would earn a total of 563.00 from holding Bloom Energy Corp or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloom Energy Corp vs. FuelCell Energy
Performance |
| Timeline |
| Bloom Energy Corp |
| FuelCell Energy |
Bloom Energy and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and FuelCell Energy
The main advantage of trading using opposite Bloom Energy and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, FuelCell 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Eos Energy Enterprises | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. Flux Power 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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