Correlation Between Advent Technologies and Southern

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Can any of the company-specific risk be diversified away by investing in both Advent Technologies and Southern 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 Southern 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 Southern Co, you can compare the effects of market volatilities on Advent Technologies and Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Technologies and Southern.

Diversification Opportunities for Advent Technologies and Southern

AdventSouthernDiversified AwayAdventSouthernDiversified Away100%
0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Advent and Southern is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Advent Technologies i.e., Advent Technologies and Southern go up and down completely randomly.

Pair Corralation between Advent Technologies and Southern

Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 6.45 times more return on investment than Southern. However, Advent Technologies is 6.45 times more volatile than Southern Co. It trades about 0.03 of its potential returns per unit of risk. Southern Co is currently generating about 0.0 per unit of risk. If you would invest  504.00  in Advent Technologies Holdings on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Advent Technologies Holdings or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Advent Technologies Holdings  vs.  Southern Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10010203040
JavaScript chart by amCharts 3.21.15ADN SOJD
       Timeline  
Advent Technologies 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Advent Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar44.555.566.57
Southern 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Southern Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, Southern is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15JanFebFebMar2020.52121.5

Advent Technologies and Southern Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-18.67-13.98-9.3-4.610.04.639.4114.218.9923.78 0.10.20.30.4
JavaScript chart by amCharts 3.21.15ADN SOJD
       Returns  

Pair Trading with Advent Technologies and Southern

The main advantage of trading using opposite Advent Technologies and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Southern 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 Southern will offset losses from the drop in Southern's long position.
The idea behind Advent Technologies Holdings and Southern Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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