Correlation Between Algonquin Power and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Algonquin 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 Algonquin 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 Algonquin Power Utilities and Bloom Energy Corp, you can compare the effects of market volatilities on Algonquin 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 Algonquin Power with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Bloom Energy.
Diversification Opportunities for Algonquin Power and Bloom Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Algonquin and Bloom is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities 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 Algonquin 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 Algonquin Power Utilities 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 Algonquin Power i.e., Algonquin Power and Bloom Energy go up and down completely randomly.
Pair Corralation between Algonquin Power and Bloom Energy
Considering the 90-day investment horizon Algonquin Power Utilities is expected to generate 0.66 times more return on investment than Bloom Energy. However, Algonquin Power Utilities is 1.51 times less risky than Bloom Energy. It trades about 0.09 of its potential returns per unit of risk. Bloom Energy Corp is currently generating about -0.05 per unit of risk. If you would invest 594.00 in Algonquin Power Utilities on January 25, 2024 and sell it today you would earn a total of 22.00 from holding Algonquin Power Utilities or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Bloom Energy Corp
Performance |
| Timeline |
| Algonquin Power Utilities |
| Bloom Energy Corp |
Algonquin Power and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Bloom Energy
The main advantage of trading using opposite Algonquin Power and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin 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.| Algonquin Power vs. Energy Vault Holdings | Algonquin Power vs. Fluence Energy | Algonquin Power vs. Altus Power | Algonquin Power vs. Excelerate Energy |
| Bloom Energy vs. Enovix Corp | Bloom Energy vs. FREYR Battery SA | Bloom Energy vs. Pioneer Power Solutions | 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |