Correlation Between Bloom Energy and Enersys

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

Bloom Energy  Enersys

Excellent 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 generate 2.57 times more return on investment than Enersys. However, Bloom Energy is 2.57 times more volatile than Enersys. It trades about 0.03 of its potential returns per unit of risk. Enersys is currently generating about 0.04 per unit of risk. If you would invest  2,204  in Bloom Energy Corp on September 6, 2024 and sell it today you would earn a total of  424.00  from holding Bloom Energy Corp or generate 19.24% return on investment over 90 days.

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

Bloom Energy Corp  vs.  Enersys

Bloom Energy Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 16 (%) 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.

Enersys

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enersys are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enersys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.