Correlation Between Bloom Energy and NVent Electric
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and NVent 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 NVent 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 nVent Electric PLC, you can compare the effects of market volatilities on Bloom Energy and NVent 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 NVent Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and NVent Electric.
Diversification Opportunities for Bloom Energy and NVent Electric
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bloom and NVent is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and nVent Electric PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nVent Electric PLC 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 NVent Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nVent Electric PLC has no effect on the direction of Bloom Energy i.e., Bloom Energy and NVent Electric go up and down completely randomly.
Pair Corralation between Bloom Energy and NVent Electric
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to under-perform the NVent Electric. In addition to that, Bloom Energy is 2.59 times more volatile than nVent Electric PLC. It trades about -0.01 of its total potential returns per unit of risk. nVent Electric PLC is currently generating about 0.21 per unit of volatility. If you would invest 6,918 in nVent Electric PLC on October 22, 2024 and sell it today you would earn a total of 314.00 from holding nVent Electric PLC or generate 4.54% 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. nVent Electric PLC
Performance |
| Timeline |
| Bloom Energy Corp |
| nVent Electric PLC |
Bloom Energy and NVent Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and NVent Electric
The main advantage of trading using opposite Bloom Energy and NVent Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, NVent 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 NVent Electric will offset losses from the drop in NVent 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 |
| NVent Electric vs. Hubbell | NVent Electric vs. Advanced Energy Industries | NVent Electric vs. Vertiv Holdings Co | NVent Electric vs. Energizer 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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