Correlation Between Advent Technologies and Fluence Energy

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

Diversification Opportunities for Advent Technologies and Fluence Energy

0.12

Correlation Coefficient

Advent Technologies  Fluence Energy

Average diversification

The 3 months correlation between Advent and Fluence is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Advent Technologies i.e., Advent Technologies and Fluence Energy go up and down completely randomly.

Pair Corralation between Advent Technologies and Fluence Energy

Assuming the 90 days horizon Advent Technologies Holdings is expected to generate 1.65 times more return on investment than Fluence Energy. However, Advent Technologies is 1.65 times more volatile than Fluence Energy. It trades about 0.1 of its potential returns per unit of risk. Fluence Energy is currently generating about -0.22 per unit of risk. If you would invest  0.80  in Advent Technologies Holdings on December 29, 2024 and sell it today you would earn a total of  0.31  from holding Advent Technologies Holdings or generate 38.75% 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.  Fluence Energy

Advent Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 7 (%) 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.

Fluence Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluence Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Advent Technologies and Fluence Energy

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

The idea behind Advent Technologies Holdings and Fluence Energy 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.