Correlation Between Brenmiller Energy and Advent Technologies

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

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

Diversification Opportunities for Brenmiller Energy and Advent Technologies

0.65

Correlation Coefficient

Brenmiller Energy  Advent Technologies

Poor diversification

The 3 months correlation between Brenmiller and Advent is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Brenmiller Energy 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 Brenmiller Energy Ltd 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 Brenmiller Energy i.e., Brenmiller Energy and Advent Technologies go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Advent Technologies

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to generate 1.75 times more return on investment than Advent Technologies. However, Brenmiller Energy is 1.75 times more volatile than Advent Technologies Holdings. It trades about 0.09 of its potential returns per unit of risk. Advent Technologies Holdings is currently generating about 0.0 per unit of risk. If you would invest  101.00  in Brenmiller Energy Ltd on December 30, 2024 and sell it today you would earn a total of  31.00  from holding Brenmiller Energy Ltd or generate 30.69% return on investment over 90 days.

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

Brenmiller Energy Ltd  vs.  Advent Technologies Holdings

Brenmiller Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Advent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Advent Technologies is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Brenmiller Energy and Advent Technologies

The main advantage of trading using opposite Brenmiller Energy and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brenmiller Energy 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 Brenmiller Energy Ltd 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.