Correlation Between Bloom Energy and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Lion Electric 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 Lion Electric 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 Lion Electric Corp, you can compare the effects of market volatilities on Bloom Energy and Lion Electric 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 Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Lion Electric.
Diversification Opportunities for Bloom Energy and Lion Electric
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bloom and Lion is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp 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 Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Bloom Energy i.e., Bloom Energy and Lion Electric go up and down completely randomly.
Pair Corralation between Bloom Energy and Lion Electric
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 1.05 times more return on investment than Lion Electric. However, Bloom Energy is 1.05 times more volatile than Lion Electric Corp. It trades about 0.07 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.14 per unit of risk. If you would invest 1,653 in Bloom Energy Corp on August 24, 2024 and sell it today you would earn a total of 741.00 from holding Bloom Energy Corp or generate 44.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloom Energy Corp vs. Lion Electric Corp
Performance |
| Timeline |
| Bloom Energy Corp |
| Lion Electric Corp |
Bloom Energy and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and Lion Electric
The main advantage of trading using opposite Bloom Energy and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| Lion Electric vs. Xos Inc | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National | Lion Electric vs. American Premium 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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