Correlation Between Centrais Electricas and Advent Technologies
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas 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 Centrais Electricas and Advent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and Advent Technologies Holdings, you can compare the effects of market volatilities on Centrais Electricas 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 Centrais Electricas with a short position of Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Advent Technologies.
Diversification Opportunities for Centrais Electricas and Advent Technologies
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centrais and Advent is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Centrais Electricas 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 Centrais Electricas Brasileiras 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 Centrais Electricas i.e., Centrais Electricas and Advent Technologies go up and down completely randomly.
Pair Corralation between Centrais Electricas and Advent Technologies
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to under-perform the Advent Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Centrais Electricas Brasileiras is 5.08 times less risky than Advent Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Advent Technologies Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 957.00 in Advent Technologies Holdings on September 2, 2024 and sell it today you would lose (467.00) from holding Advent Technologies Holdings or give up 48.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Advent Technologies Holdings
Performance |
| Timeline |
| Centrais Electricas |
| Advent Technologies |
Centrais Electricas and Advent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Advent Technologies
The main advantage of trading using opposite Centrais Electricas and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas 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.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| Advent Technologies vs. Fusion Fuel Green | Advent Technologies vs. Fluence Energy | Advent Technologies vs. Altus Power | Advent Technologies vs. Energy Vault 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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