Correlation Between Advent Technologies and Brenmiller Energy

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

Diversification Opportunities for Advent Technologies and Brenmiller Energy

0.04

Correlation Coefficient

Advent Technologies  Brenmiller Energy

Significant diversification

The 3 months correlation between Advent and Brenmiller is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Advent Technologies i.e., Advent Technologies and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Advent Technologies and Brenmiller Energy

Considering the 90-day investment horizon Advent Technologies is expected to generate 8.65 times less return on investment than Brenmiller Energy. But when comparing it to its historical volatility, Advent Technologies Holdings is 1.92 times less risky than Brenmiller Energy. It trades about 0.03 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  82.00  in Brenmiller Energy Ltd on November 29, 2024 and sell it today you would earn a total of  72.00  from holding Brenmiller Energy Ltd or generate 87.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Advent Technologies Holdings  vs.  Brenmiller Energy Ltd

Advent Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Advent Technologies may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Brenmiller Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Technologies and Brenmiller Energy

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

The idea behind Advent Technologies Holdings and Brenmiller Energy Ltd 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.