Correlation Between Bloom Energy and Electrovaya Common

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Can any of the company-specific risk be diversified away by investing in both Bloom Energy and Electrovaya Common 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 Electrovaya Common 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 Electrovaya Common Shares, you can compare the effects of market volatilities on Bloom Energy and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Energy and Electrovaya Common.

Diversification Opportunities for Bloom Energy and Electrovaya Common

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bloom and Electrovaya is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Bloom Energy i.e., Bloom Energy and Electrovaya Common go up and down completely randomly.

Pair Corralation between Bloom Energy and Electrovaya Common

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to under-perform the Electrovaya Common. In addition to that, Bloom Energy is 1.03 times more volatile than Electrovaya Common Shares. It trades about -0.02 of its total potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.03 per unit of volatility. If you would invest  325.00  in Electrovaya Common Shares on December 3, 2023 and sell it today you would earn a total of  79.00  from holding Electrovaya Common Shares or generate 24.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bloom Energy Corp  vs.  Electrovaya Common Shares

 Performance 
       Timeline  
Bloom Energy Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Electrovaya Common Shares 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Bloom Energy and Electrovaya Common Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bloom Energy and Electrovaya Common

The main advantage of trading using opposite Bloom Energy and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common's long position.
The idea behind Bloom Energy Corp and Electrovaya Common Shares 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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