Correlation Between Vision Energy and Advent Technologies

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

Diversification Opportunities for Vision Energy and Advent Technologies

-0.22

Correlation Coefficient

Vision Energy  Advent Technologies

Very good diversification

The 3 months correlation between Vision and Advent is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vision Energy Corp and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Vision 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 Vision Energy Corp 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 Vision Energy i.e., Vision Energy and Advent Technologies go up and down completely randomly.

Pair Corralation between Vision Energy and Advent Technologies

Given the investment horizon of 90 days Vision Energy Corp is expected to generate 23.83 times more return on investment than Advent Technologies. However, Vision Energy is 23.83 times more volatile than Advent Technologies Holdings. It trades about 0.24 of its potential returns per unit of risk. Advent Technologies Holdings is currently generating about 0.04 per unit of risk. If you would invest  0.02  in Vision Energy Corp on September 3, 2024 and sell it today you would lose (0.01) from holding Vision Energy Corp or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Vision Energy Corp  vs.  Advent Technologies Holdings

Vision Energy Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 19 (%) 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.

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.

Pair Trading with Vision Energy and Advent Technologies

The main advantage of trading using opposite Vision Energy and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vision 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 Vision Energy Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.