Correlation Between Advent Technologies and Brookfield Renewable

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

Diversification Opportunities for Advent Technologies and Brookfield Renewable

-0.41

Correlation Coefficient

Advent Technologies  Brookfield Renewable

Very good diversification

The 3 months correlation between Advent and Brookfield is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable 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 Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable has no effect on the direction of Advent Technologies i.e., Advent Technologies and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Advent Technologies and Brookfield Renewable

Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 3.1 times more return on investment than Brookfield Renewable. However, Advent Technologies is 3.1 times more volatile than Brookfield Renewable Partners. It trades about 0.0 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about 0.0 per unit of risk. If you would invest  529.00  in Advent Technologies Holdings on December 29, 2024 and sell it today you would lose (56.00) from holding Advent Technologies Holdings or give up 10.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advent Technologies Holdings  vs.  Brookfield Renewable Partners

Advent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Advent Technologies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Brookfield Renewable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Renewable Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Brookfield Renewable is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Advent Technologies and Brookfield Renewable

The main advantage of trading using opposite Advent Technologies and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Technologies position performs unexpectedly, Brookfield Renewable 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 Brookfield Renewable will offset losses from the drop in Brookfield Renewable's long position.

The idea behind Advent Technologies Holdings and Brookfield Renewable Partners 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.

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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.