Correlation Between Bloom Energy and Transportation Fund
Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Transportation Fund 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 Transportation Fund 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 Transportation Fund Investor, you can compare the effects of market volatilities on Bloom Energy and Transportation Fund 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 Transportation Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Transportation Fund.
Diversification Opportunities for Bloom Energy and Transportation Fund
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bloom and Transportation is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Transportation Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportation Fund 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 Transportation Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportation Fund has no effect on the direction of Bloom Energy i.e., Bloom Energy and Transportation Fund go up and down completely randomly.
Pair Corralation between Bloom Energy and Transportation Fund
Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 8.75 times more return on investment than Transportation Fund. However, Bloom Energy is 8.75 times more volatile than Transportation Fund Investor. It trades about 0.39 of its potential returns per unit of risk. Transportation Fund Investor is currently generating about 0.19 per unit of risk. If you would invest 1,014 in Bloom Energy Corp on August 30, 2024 and sell it today you would earn a total of 1,707 from holding Bloom Energy Corp or generate 168.34% 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. Transportation Fund Investor
Performance |
| Timeline |
| Bloom Energy Corp |
| Transportation Fund |
Bloom Energy and Transportation Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Energy and Transportation Fund
The main advantage of trading using opposite Bloom Energy and Transportation Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Transportation Fund 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 Transportation Fund will offset losses from the drop in Transportation Fund's long position.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
| Transportation Fund vs. Health Care Fund | Transportation Fund vs. Financial Services Fund | Transportation Fund vs. Technology Fund Investor | Transportation Fund vs. Banking Fund Investor |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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