Correlation Between Advent Technologies and Enlight Renewable

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

Diversification Opportunities for Advent Technologies and Enlight Renewable

0.32

Correlation Coefficient

Advent Technologies  Enlight Renewable

Weak diversification

The 3 months correlation between Advent and Enlight is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy 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 Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Advent Technologies i.e., Advent Technologies and Enlight Renewable go up and down completely randomly.

Pair Corralation between Advent Technologies and Enlight Renewable

Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 5.39 times more return on investment than Enlight Renewable. However, Advent Technologies is 5.39 times more volatile than Enlight Renewable Energy. It trades about 0.15 of its potential returns per unit of risk. Enlight Renewable Energy is currently generating about 0.02 per unit of risk. If you would invest  195.00  in Advent Technologies Holdings on September 25, 2024 and sell it today you would earn a total of  238.00  from holding Advent Technologies Holdings or generate 122.05% return on investment over 90 days.

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

Advent Technologies Holdings  vs.  Enlight Renewable Energy

Advent Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Advent Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Enlight Renewable Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Enlight Renewable is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Advent Technologies and Enlight Renewable

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

The idea behind Advent Technologies Holdings and Enlight Renewable Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.