Correlation Between Altus Power and Advent Technologies
Can any of the company-specific risk be diversified away by investing in both Altus Power and Advent Technologies 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 Altus Power and Advent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and Advent Technologies Holdings, you can compare the effects of market volatilities on Altus Power and Advent Technologies 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 Altus Power with a short position of Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Advent Technologies.
Diversification Opportunities for Altus Power and Advent Technologies
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altus and Advent is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Altus Power 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 Altus Power are associated (or correlated) with Advent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Technologies has no effect on the direction of Altus Power i.e., Altus Power and Advent Technologies go up and down completely randomly.
Pair Corralation between Altus Power and Advent Technologies
Given the investment horizon of 90 days Altus Power is expected to generate 0.58 times more return on investment than Advent Technologies. However, Altus Power is 1.73 times less risky than Advent Technologies. It trades about 0.0 of its potential returns per unit of risk. Advent Technologies Holdings is currently generating about -0.02 per unit of risk. If you would invest 685.00 in Altus Power on August 24, 2024 and sell it today you would lose (268.00) from holding Altus Power or give up 39.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Power vs. Advent Technologies Holdings
Performance |
| Timeline |
| Altus Power |
| Advent Technologies |
Altus Power and Advent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Power and Advent Technologies
The main advantage of trading using opposite Altus Power and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Advent Technologies 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 Advent Technologies will offset losses from the drop in Advent Technologies' long position.| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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