Correlation Between Advent Technologies and Constellation Energy

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

Diversification Opportunities for Advent Technologies and Constellation Energy

0.47

Correlation Coefficient

Advent Technologies  Constellation Energy

Very weak diversification

The 3 months correlation between Advent and Constellation is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Constellation Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Energy Corp 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 Constellation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Energy Corp has no effect on the direction of Advent Technologies i.e., Advent Technologies and Constellation Energy go up and down completely randomly.

Pair Corralation between Advent Technologies and Constellation Energy

Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 1.12 times more return on investment than Constellation Energy. However, Advent Technologies is 1.12 times more volatile than Constellation Energy Corp. It trades about 0.0 of its potential returns per unit of risk. Constellation Energy Corp is currently generating about 0.0 per unit of risk. If you would invest  529.00  in Advent Technologies Holdings on December 30, 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 Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Advent Technologies Holdings  vs.  Constellation Energy Corp

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 current stock price disarray, may contribute to short-term losses for the investors.

Constellation Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Constellation Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Constellation Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Advent Technologies and Constellation Energy

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

The idea behind Advent Technologies Holdings and Constellation Energy Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.