Correlation Between Bloom Energy and ESS Tech
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and ESS Tech 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 ESS Tech 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 ESS Tech, you can compare the effects of market volatilities on Bloom Energy and ESS Tech 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 ESS Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and ESS Tech.
Diversification Opportunities for Bloom Energy and ESS Tech
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bloom and ESS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and ESS Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESS Tech 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 ESS Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESS Tech has no effect on the direction of Bloom Energy i.e., Bloom Energy and ESS Tech go up and down completely randomly.
Pair Corralation between Bloom Energy and ESS Tech
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 0.81 times more return on investment than ESS Tech. However, Bloom Energy Corp is 1.24 times less risky than ESS Tech. It trades about 0.04 of its potential returns per unit of risk. ESS Tech is currently generating about -0.03 per unit of risk. If you would invest 1,903 in Bloom Energy Corp on August 28, 2024 and sell it today you would earn a total of 714.00 from holding Bloom Energy Corp or generate 37.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloom Energy Corp vs. ESS Tech
Performance |
| Timeline |
| Bloom Energy Corp |
| ESS Tech |
Bloom Energy and ESS Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and ESS Tech
The main advantage of trading using opposite Bloom Energy and ESS Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, ESS Tech 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 ESS Tech will offset losses from the drop in ESS Tech's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| ESS Tech vs. Fluence Energy | ESS Tech vs. Solid Power | ESS Tech vs. Eos Energy Enterprises | ESS Tech vs. FREYR Battery SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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