Correlation Between Tritium Dcfc and Bloom Energy

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

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

Diversification Opportunities for Tritium Dcfc and Bloom Energy

0.06

Correlation Coefficient

Tritium Dcfc  Bloom Energy

Significant diversification

The 3 months correlation between Tritium and Bloom is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tritium Dcfc 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 Tritium Dcfc 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 Tritium Dcfc 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 Tritium Dcfc i.e., Tritium Dcfc and Bloom Energy go up and down completely randomly.

Pair Corralation between Tritium Dcfc and Bloom Energy

Given the investment horizon of 90 days Tritium Dcfc is expected to under-perform the Bloom Energy. In addition to that, Tritium Dcfc is 1.84 times more volatile than Bloom Energy Corp. It trades about -0.18 of its total potential returns per unit of risk. Bloom Energy Corp is currently generating about -0.04 per unit of volatility. If you would invest  1,788  in Bloom Energy Corp on January 19, 2024 and sell it today you would lose (797.00) from holding Bloom Energy Corp or give up 44.57% of portfolio value over 90 days.

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

Tritium Dcfc  vs.  Bloom Energy Corp

Tritium Dcfc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritium Dcfc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent 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.

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.

Pair Trading with Tritium Dcfc and Bloom Energy

The main advantage of trading using opposite Tritium Dcfc and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tritium Dcfc 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 Tritium Dcfc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.