Correlation Between Advent Technologies and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both Advent Technologies and Lundin 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 Lundin 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 Lundin Energy AB, you can compare the effects of market volatilities on Advent Technologies and Lundin 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 Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Technologies and Lundin Energy.
Diversification Opportunities for Advent Technologies and Lundin Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advent and Lundin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB 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 Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Advent Technologies i.e., Advent Technologies and Lundin Energy go up and down completely randomly.
Pair Corralation between Advent Technologies and Lundin Energy
Assuming the 90 days horizon Advent Technologies Holdings is expected to generate 3.99 times more return on investment than Lundin Energy. However, Advent Technologies is 3.99 times more volatile than Lundin Energy AB. It trades about 0.16 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.29 per unit of risk. If you would invest 0.99 in Advent Technologies Holdings on August 24, 2024 and sell it today you would earn a total of 0.30 from holding Advent Technologies Holdings or generate 30.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advent Technologies Holdings vs. Lundin Energy AB
Performance |
| Timeline |
| Advent Technologies |
| Lundin Energy AB |
Advent Technologies and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Technologies and Lundin Energy
The main advantage of trading using opposite Advent Technologies and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Lundin 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.| Advent Technologies vs. Advent Technologies Holdings | Advent Technologies vs. Fusion Fuel Green | Advent Technologies vs. HUMANA INC | Advent Technologies vs. Aquagold International |
| Lundin Energy vs. Renew Energy Global | Lundin Energy vs. Energy Vault Holdings | Lundin Energy vs. Fluence Energy | Lundin Energy vs. Advent Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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