Correlation Between Bloom Energy and Enersys

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

Diversification Opportunities for Bloom Energy and Enersys

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bloom and Enersys is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys 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 Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of Bloom Energy i.e., Bloom Energy and Enersys go up and down completely randomly.

Pair Corralation between Bloom Energy and Enersys

Allowing for the 90-day total investment horizon Bloom Energy Corp is expected to under-perform the Enersys. In addition to that, Bloom Energy is 2.77 times more volatile than Enersys. It trades about -0.03 of its total potential returns per unit of risk. Enersys is currently generating about -0.04 per unit of volatility. If you would invest  9,136  in Enersys on January 22, 2024 and sell it today you would lose (86.00) from holding Enersys or give up 0.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bloom Energy Corp  vs.  Enersys

 Performance 
       Timeline  
Bloom Energy Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Enersys 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Enersys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bloom Energy and Enersys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bloom Energy and Enersys

The main advantage of trading using opposite Bloom Energy and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Energy position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.
The idea behind Bloom Energy Corp and Enersys 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.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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