Correlation Between Evercel and Bloom Energy

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

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

Diversification Opportunities for Evercel and Bloom Energy

-0.34

Correlation Coefficient

Evercel  Bloom Energy

Very good diversification

The 3 months correlation between Evercel and Bloom is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Evercel 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 Evercel 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 Evercel 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 Evercel i.e., Evercel and Bloom Energy go up and down completely randomly.

Pair Corralation between Evercel and Bloom Energy

If you would invest  1,173  in Bloom Energy Corp on March 2, 2024 and sell it today you would earn a total of  491.00  from holding Bloom Energy Corp or generate 41.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.27%
Values	Daily Returns

Evercel  vs.  Bloom Energy Corp

Evercel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bloom Energy Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Bloom Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evercel and Bloom Energy

The main advantage of trading using opposite Evercel and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evercel 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 Evercel 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 Global Correlations module to find global opportunities by holding instruments from different markets.