Correlation Between Advent Technologies and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Advent Technologies and Algonquin Power 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 Advent Technologies and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advent Technologies Holdings and Algonquin Power Utilities, you can compare the effects of market volatilities on Advent Technologies and Algonquin Power 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 Advent Technologies with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Technologies and Algonquin Power.
Diversification Opportunities for Advent Technologies and Algonquin Power
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advent and Algonquin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and Advent Technologies 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 Advent Technologies Holdings are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Advent Technologies i.e., Advent Technologies and Algonquin Power go up and down completely randomly.
Pair Corralation between Advent Technologies and Algonquin Power
Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 4.71 times more return on investment than Algonquin Power. However, Advent Technologies is 4.71 times more volatile than Algonquin Power Utilities. It trades about -0.01 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.05 per unit of risk. If you would invest 2,199 in Advent Technologies Holdings on August 31, 2024 and sell it today you would lose (1,709) from holding Advent Technologies Holdings or give up 77.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.98% |
| Values | Daily Returns |
Advent Technologies Holdings vs. Algonquin Power Utilities
Performance |
| Timeline |
| Advent Technologies |
| Algonquin Power Utilities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Advent Technologies and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Technologies and Algonquin Power
The main advantage of trading using opposite Advent Technologies and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Advent Technologies vs. Fluence Energy | Advent Technologies vs. Altus Power | Advent Technologies vs. Energy Vault Holdings | Advent Technologies vs. Enlight Renewable Energy |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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