Correlation Between Bloom Energy and Ault Alliance

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

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

Diversification Opportunities for Bloom Energy and Ault Alliance

0.38

Correlation Coefficient

Bloom Energy  Ault Alliance

Weak diversification

The 3 months correlation between Bloom and Ault is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance and Bloom Energy 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 Bloom Energy Corp are associated (or correlated) with Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Bloom Energy i.e., Bloom Energy and Ault Alliance go up and down completely randomly.

Pair Corralation between Bloom Energy and Ault Alliance

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to generate 0.61 times more return on investment than Ault Alliance. However, Bloom Energy Corp is 1.65 times less risky than Ault Alliance. It trades about 0.08 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.4 per unit of risk. If you would invest  947.00  in Bloom Energy Corp on January 19, 2024 and sell it today you would earn a total of  44.00  from holding Bloom Energy Corp or generate 4.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bloom Energy Corp  vs.  Ault Alliance

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 latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bloom Energy and Ault Alliance

The main advantage of trading using opposite Bloom Energy and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.

The idea behind Bloom Energy Corp and Ault Alliance 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..