Correlation Between Eos Energy and Bloom Energy

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Can any of the company-specific risk be diversified away by investing in both Eos Energy and Bloom 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 Eos Energy and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eos Energy Enterprises and Bloom Energy Corp, you can compare the effects of market volatilities on Eos Energy and Bloom 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 Eos Energy with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Bloom Energy.

Diversification Opportunities for Eos Energy and Bloom Energy

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Eos and Bloom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Bloom Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy Corp and Eos 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 Eos Energy Enterprises are associated (or correlated) with Bloom Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Energy Corp has no effect on the direction of Eos Energy i.e., Eos Energy and Bloom Energy go up and down completely randomly.

Pair Corralation between Eos Energy and Bloom Energy

Assuming the 90 days horizon Eos Energy is expected to generate 6.19 times less return on investment than Bloom Energy. In addition to that, Eos Energy is 1.16 times more volatile than Bloom Energy Corp. It trades about 0.05 of its total potential returns per unit of risk. Bloom Energy Corp is currently generating about 0.38 per unit of volatility. 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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eos Energy Enterprises  vs.  Bloom Energy Corp

 Performance 
       Timeline  
Eos Energy Enterprises 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Eos Energy Enterprises are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Eos Energy showed solid returns over the last few months and may actually be approaching a breakup point.
Bloom Energy Corp 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Bloom Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Eos Energy and Bloom Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eos Energy and Bloom Energy

The main advantage of trading using opposite Eos Energy and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Bloom 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 Bloom Energy will offset losses from the drop in Bloom Energy's long position.
The idea behind Eos Energy Enterprises and Bloom Energy Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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