Correlation Between Asia Pacific and Bloom Energy

Can any of the company-specific risk be diversified away by investing in both Asia Pacific 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 Asia Pacific and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Pacific Wire and Bloom Energy Corp, you can compare the effects of market volatilities on Asia Pacific 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 Asia Pacific with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Bloom Energy.

Diversification Opportunities for Asia Pacific and Bloom Energy

0.0

Correlation Coefficient

Asia Pacific  Bloom Energy

Pay attention - limited upside

The 3 months correlation between Asia and Bloom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Wire 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 Asia Pacific 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 Asia Pacific Wire 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 Asia Pacific i.e., Asia Pacific and Bloom Energy go up and down completely randomly.

Pair Corralation between Asia Pacific and Bloom Energy

Given the investment horizon of 90 days Asia Pacific Wire is expected to generate 0.91 times more return on investment than Bloom Energy. However, Asia Pacific Wire is 1.1 times less risky than Bloom Energy. It trades about 0.08 of its potential returns per unit of risk. Bloom Energy Corp is currently generating about -0.11 per unit of risk. If you would invest  130.00  in Asia Pacific Wire on January 24, 2024 and sell it today you would earn a total of  5.00  from holding Asia Pacific Wire or generate 3.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Asia Pacific Wire  vs.  Bloom Energy Corp

Asia Pacific Wire

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Asia Pacific Wire has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asia Pacific is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bloom Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bloom Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Asia Pacific and Bloom Energy

The main advantage of trading using opposite Asia Pacific and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific 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 Asia Pacific Wire 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.