Correlation Between Commercial Vehicle and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle 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 Commercial Vehicle and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Bloom Energy, you can compare the effects of market volatilities on Commercial Vehicle 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 Commercial Vehicle with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Bloom Energy.
Diversification Opportunities for Commercial Vehicle and Bloom Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commercial and Bloom is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and Commercial Vehicle 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 Commercial Vehicle Group 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 has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Bloom Energy go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Bloom Energy
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Bloom Energy. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 2.39 times less risky than Bloom Energy. The stock trades about -0.12 of its potential returns per unit of risk. The Bloom Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,506 in Bloom Energy on August 28, 2024 and sell it today you would earn a total of 1,031 from holding Bloom Energy or generate 68.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Bloom Energy
Performance |
| Timeline |
| Commercial Vehicle |
| Bloom Energy |
Commercial Vehicle and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Bloom Energy
The main advantage of trading using opposite Commercial Vehicle and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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.| Commercial Vehicle vs. XLMedia PLC | Commercial Vehicle vs. Flutter Entertainment PLC | Commercial Vehicle vs. ANTA SPORTS PRODUCT | Commercial Vehicle vs. PT Global Mediacom |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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