Correlation Between Azure Power and Advent Technologies

Can any of the company-specific risk be diversified away by investing in both Azure Power and Advent Technologies 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 Azure Power and Advent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Azure Power Global and Advent Technologies Holdings, you can compare the effects of market volatilities on Azure Power and Advent Technologies 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 Azure Power with a short position of Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Power and Advent Technologies.

Diversification Opportunities for Azure Power and Advent Technologies

0.0

Correlation Coefficient

Azure Power  Advent Technologies

Pay attention - limited upside

The 3 months correlation between Azure and Advent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Azure Power Global and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Azure Power 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 Azure Power Global are associated (or correlated) with Advent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Technologies has no effect on the direction of Azure Power i.e., Azure Power and Advent Technologies go up and down completely randomly.

Pair Corralation between Azure Power and Advent Technologies

If you would invest  490.00  in Advent Technologies Holdings on November 29, 2024 and sell it today you would earn a total of  6.00  from holding Advent Technologies Holdings or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Azure Power Global  vs.  Advent Technologies Holdings

Azure Power Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Azure Power Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Azure Power is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Advent Technologies

Risk-Adjusted Performance

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 very weak fundamental indicators, Advent Technologies may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Azure Power and Advent Technologies

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

The idea behind Azure Power Global and Advent Technologies Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.