Correlation Between Advent Technologies and Altus Power

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

Diversification Opportunities for Advent Technologies and Altus Power

0.43

Correlation Coefficient

Advent Technologies  Altus Power

Very weak diversification

The 3 months correlation between Advent and Altus is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power 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 Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of Advent Technologies i.e., Advent Technologies and Altus Power go up and down completely randomly.

Pair Corralation between Advent Technologies and Altus Power

Assuming the 90 days horizon Advent Technologies is expected to generate 2.64 times less return on investment than Altus Power. In addition to that, Advent Technologies is 1.43 times more volatile than Altus Power. It trades about 0.03 of its total potential returns per unit of risk. Altus Power is currently generating about 0.12 per unit of volatility. If you would invest  297.00  in Altus Power on August 31, 2024 and sell it today you would earn a total of  139.00  from holding Altus Power or generate 46.8% return on investment over 90 days.

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

Advent Technologies Holdings  vs.  Altus Power

Advent Technologies

Risk-Adjusted Performance

2 of 100

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 fairly unfluctuating basic indicators, Advent Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Altus Power

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altus Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Altus Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Technologies and Altus Power

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

The idea behind Advent Technologies Holdings and Altus Power 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.