Correlation Between Xos Equity and Advent Technologies

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

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

Diversification Opportunities for Xos Equity and Advent Technologies

-0.34

Correlation Coefficient

Xos Equity  Advent Technologies

Very good diversification

The 3 months correlation between Xos and Advent is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and Xos Equity 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 Xos Equity Warrants 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 Xos Equity i.e., Xos Equity and Advent Technologies go up and down completely randomly.

Pair Corralation between Xos Equity and Advent Technologies

Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Advent Technologies. In addition to that, Xos Equity is 1.43 times more volatile than Advent Technologies Holdings. It trades about -0.1 of its total potential returns per unit of risk. Advent Technologies Holdings is currently generating about 0.07 per unit of volatility. If you would invest  0.88  in Advent Technologies Holdings on September 13, 2024 and sell it today you would earn a total of  0.12  from holding Advent Technologies Holdings or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Xos Equity Warrants  vs.  Advent Technologies Holdings

Xos Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xos Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Advent Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 5 (%) 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 Xos Equity and Advent Technologies

The main advantage of trading using opposite Xos Equity and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity 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 Xos Equity Warrants 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.