Correlation Between Clearway Energy and Advent Technologies
Can any of the company-specific risk be diversified away by investing in both Clearway Energy 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 Clearway Energy and Advent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy Class and Advent Technologies Holdings, you can compare the effects of market volatilities on Clearway Energy 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 Clearway Energy with a short position of Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Advent Technologies.
Diversification Opportunities for Clearway Energy and Advent Technologies
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clearway and Advent is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy Class and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Clearway Energy 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 Clearway Energy Class 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 Clearway Energy i.e., Clearway Energy and Advent Technologies go up and down completely randomly.
Pair Corralation between Clearway Energy and Advent Technologies
Given the investment horizon of 90 days Clearway Energy Class is expected to under-perform the Advent Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Clearway Energy Class is 3.43 times less risky than Advent Technologies. The stock trades about -0.03 of its potential returns per unit of risk. The Advent Technologies Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Clearway Energy Class vs. Advent Technologies Holdings
Performance |
| Timeline |
| Clearway Energy Class |
| Advent Technologies |
Clearway Energy and Advent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and Advent Technologies
The main advantage of trading using opposite Clearway Energy and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy 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.| Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Clearway Energy | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Orsted AS ADR |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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