Correlation Between Advent Technologies and Altius Renewable

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

Diversification Opportunities for Advent Technologies and Altius Renewable

0.18

Correlation Coefficient

Advent Technologies  Altius Renewable

Average diversification

The 3 months correlation between Advent and Altius is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Altius Renewable Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Renewable Roy 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 Altius Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Renewable Roy has no effect on the direction of Advent Technologies i.e., Advent Technologies and Altius Renewable go up and down completely randomly.

Pair Corralation between Advent Technologies and Altius Renewable

Assuming the 90 days horizon Advent Technologies is expected to generate 1.33 times less return on investment than Altius Renewable. In addition to that, Advent Technologies is 6.48 times more volatile than Altius Renewable Royalties. It trades about 0.01 of its total potential returns per unit of risk. Altius Renewable Royalties is currently generating about 0.1 per unit of volatility. If you would invest  586.00  in Altius Renewable Royalties on October 2, 2024 and sell it today you would earn a total of  264.00  from holding Altius Renewable Royalties or generate 45.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.72%
Values	Daily Returns

Advent Technologies Holdings  vs.  Altius Renewable Royalties

Advent Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 3 (%) 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.

Altius Renewable Roy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altius Renewable Royalties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altius Renewable 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 Altius Renewable

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

The idea behind Advent Technologies Holdings and Altius Renewable Royalties 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.