Correlation Between Stardust Power and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Stardust Power 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 Stardust Power and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stardust Power and Bloom Energy Corp, you can compare the effects of market volatilities on Stardust Power 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 Stardust Power with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stardust Power and Bloom Energy.
Diversification Opportunities for Stardust Power and Bloom Energy
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stardust and Bloom is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Stardust Power 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 Stardust Power 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 Stardust Power 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 Stardust Power i.e., Stardust Power and Bloom Energy go up and down completely randomly.
Pair Corralation between Stardust Power and Bloom Energy
Given the investment horizon of 90 days Stardust Power is expected to under-perform the Bloom Energy. But the stock apears to be less risky and, when comparing its historical volatility, Stardust Power is 1.7 times less risky than Bloom Energy. The stock trades about -0.13 of its potential returns per unit of risk. The Bloom Energy Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Bloom Energy Corp on September 12, 2024 and sell it today you would earn a total of 1,320 from holding Bloom Energy Corp or generate 127.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stardust Power vs. Bloom Energy Corp
Performance |
| Timeline |
| Stardust Power |
| Bloom Energy Corp |
Stardust Power and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stardust Power and Bloom Energy
The main advantage of trading using opposite Stardust Power and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stardust Power 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.| Stardust Power vs. Addus HomeCare | Stardust Power vs. Mannatech Incorporated | Stardust Power vs. Skechers USA | Stardust Power vs. MI Homes |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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