Correlation Between Advent Technologies and Vision Energy

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

Diversification Opportunities for Advent Technologies and Vision Energy

-0.26

Correlation Coefficient

Advent Technologies  Vision Energy

Very good diversification

The 3 months correlation between Advent and Vision is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Vision Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vision 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 Vision Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vision Energy Corp has no effect on the direction of Advent Technologies i.e., Advent Technologies and Vision Energy go up and down completely randomly.

Pair Corralation between Advent Technologies and Vision Energy

Assuming the 90 days horizon Advent Technologies is expected to generate 13.86 times less return on investment than Vision Energy. But when comparing it to its historical volatility, Advent Technologies Holdings is 6.13 times less risky than Vision Energy. It trades about 0.08 of its potential returns per unit of risk. Vision Energy Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Vision Energy Corp on December 1, 2024 and sell it today you would lose (0.04) from holding Vision Energy Corp or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Advent Technologies Holdings  vs.  Vision Energy Corp

Advent Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 6 (%) 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.

Vision Energy Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vision Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Technologies and Vision Energy

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

The idea behind Advent Technologies Holdings and Vision 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.