Correlation Between Advent Technologies and Northwest Natural
Can any of the company-specific risk be diversified away by investing in both Advent Technologies and Northwest Natural 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 Northwest Natural 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 Northwest Natural Gas, you can compare the effects of market volatilities on Advent Technologies and Northwest Natural 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 Northwest Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Technologies and Northwest Natural.
Diversification Opportunities for Advent Technologies and Northwest Natural
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Northwest is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Northwest Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Natural Gas 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 Northwest Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Natural Gas has no effect on the direction of Advent Technologies i.e., Advent Technologies and Northwest Natural go up and down completely randomly.
Pair Corralation between Advent Technologies and Northwest Natural
Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 14.84 times more return on investment than Northwest Natural. However, Advent Technologies is 14.84 times more volatile than Northwest Natural Gas. It trades about 0.39 of its potential returns per unit of risk. Northwest Natural Gas is currently generating about 0.3 per unit of risk. If you would invest 184.00 in Advent Technologies Holdings on August 27, 2024 and sell it today you would earn a total of 546.00 from holding Advent Technologies Holdings or generate 296.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Technologies Holdings vs. Northwest Natural Gas
Performance |
| Timeline |
| Advent Technologies |
| Northwest Natural Gas |
Advent Technologies and Northwest Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Technologies and Northwest Natural
The main advantage of trading using opposite Advent Technologies and Northwest Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Northwest Natural 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 Northwest Natural will offset losses from the drop in Northwest Natural's long position.| Advent Technologies vs. Fusion Fuel Green | Advent Technologies vs. Fluence Energy | Advent Technologies vs. Altus Power | Advent Technologies vs. Energy Vault Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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