Correlation Between Advent Technologies and Renew Energy
Can any of the company-specific risk be diversified away by investing in both Advent Technologies and Renew 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 Advent Technologies and Renew Energy 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 Renew Energy Global, you can compare the effects of market volatilities on Advent Technologies and Renew 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 Advent Technologies with a short position of Renew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Technologies and Renew Energy.
Diversification Opportunities for Advent Technologies and Renew Energy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and Renew is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Renew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renew Energy Global 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 Renew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renew Energy Global has no effect on the direction of Advent Technologies i.e., Advent Technologies and Renew Energy go up and down completely randomly.
Pair Corralation between Advent Technologies and Renew Energy
Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 5.68 times more return on investment than Renew Energy. However, Advent Technologies is 5.68 times more volatile than Renew Energy Global. It trades about 0.1 of its potential returns per unit of risk. Renew Energy Global is currently generating about -0.01 per unit of risk. If you would invest 505.00 in Advent Technologies Holdings on October 26, 2024 and sell it today you would earn a total of 43.00 from holding Advent Technologies Holdings or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Advent Technologies Holdings vs. Renew Energy Global
Performance |
| Timeline |
| Advent Technologies |
| Renew Energy Global |
Advent Technologies and Renew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Technologies and Renew Energy
The main advantage of trading using opposite Advent Technologies and Renew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Renew 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 Renew Energy will offset losses from the drop in Renew Energy'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 |
| Renew Energy vs. Energy Vault Holdings | Renew Energy vs. Fluence Energy | Renew Energy vs. Altus Power | Renew Energy vs. Clearway Energy Class |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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