Correlation Between Hoku and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Hoku 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 Hoku and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoku Corporation and Bloom Energy Corp, you can compare the effects of market volatilities on Hoku 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 Hoku with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoku and Bloom Energy.
Diversification Opportunities for Hoku and Bloom Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hoku and Bloom is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hoku Corp. 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 Hoku 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 Hoku Corporation 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 Hoku i.e., Hoku and Bloom Energy go up and down completely randomly.
Pair Corralation between Hoku and Bloom Energy
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 Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Hoku Corp. vs. Bloom Energy Corp
Performance |
| Timeline |
| Hoku |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bloom Energy Corp |
Hoku and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoku and Bloom Energy
The main advantage of trading using opposite Hoku and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoku 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 Hoku Corporation 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.| Bloom Energy vs. Plug Power | Bloom Energy vs. Microvast Holdings | Bloom Energy vs. Solid Power | Bloom Energy vs. CBAK Energy Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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