Correlation Between Bloom Energy and Tritium Dcfc

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

Diversification Opportunities for Bloom Energy and Tritium Dcfc

-0.64

Correlation Coefficient

Bloom Energy  Tritium Dcfc

Excellent diversification

The 3 months correlation between Bloom and Tritium is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Energy Corp and Tritium Dcfc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritium Dcfc 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 Tritium Dcfc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritium Dcfc has no effect on the direction of Bloom Energy i.e., Bloom Energy and Tritium Dcfc go up and down completely randomly.

Pair Corralation between Bloom Energy and Tritium Dcfc

Allowing for the 90-day total investment horizon Bloom Energy is expected to generate 4.3 times less return on investment than Tritium Dcfc. But when comparing it to its historical volatility, Bloom Energy Corp is 8.08 times less risky than Tritium Dcfc. It trades about 0.06 of its potential returns per unit of risk. Tritium Dcfc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,020  in Tritium Dcfc on September 13, 2024 and sell it today you would lose (4,006) from holding Tritium Dcfc or give up 99.65% of portfolio value over 90 days.

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

Bloom Energy Corp  vs.  Tritium Dcfc

Bloom Energy Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Bloom Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tritium Dcfc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tritium Dcfc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Tritium Dcfc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloom Energy and Tritium Dcfc

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

The idea behind Bloom Energy Corp and Tritium Dcfc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.