Correlation Between McPhy Energy and Bloom Energy

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

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

Diversification Opportunities for McPhy Energy and Bloom Energy

-0.42

Correlation Coefficient

McPhy Energy  Bloom Energy

Very good diversification

The 3 months correlation between McPhy and Bloom is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding McPhy Energy SA 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 McPhy 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 McPhy Energy SA 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 McPhy Energy i.e., McPhy Energy and Bloom Energy go up and down completely randomly.

Pair Corralation between McPhy Energy and Bloom Energy

Assuming the 90 days horizon McPhy Energy SA is expected to generate 5.74 times more return on investment than Bloom Energy. However, McPhy Energy is 5.74 times more volatile than Bloom Energy Corp. It trades about 0.05 of its potential returns per unit of risk. Bloom Energy Corp is currently generating about 0.27 per unit of risk. If you would invest  49.00  in McPhy Energy SA on May 7, 2025 and sell it today you would lose (48.99) from holding McPhy Energy SA or give up 99.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

McPhy Energy SA  vs.  Bloom Energy Corp

McPhy Energy SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in McPhy Energy SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, McPhy Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Bloom Energy Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Energy Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting 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 McPhy Energy and Bloom Energy

The main advantage of trading using opposite McPhy Energy and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McPhy Energy 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 McPhy Energy SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.