Correlation Between Advent Technologies and NiSource

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

Diversification Opportunities for Advent Technologies and NiSource

-0.03

Correlation Coefficient

Advent Technologies  NiSource

Good diversification

The 3 months correlation between Advent and NiSource is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource 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 NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of Advent Technologies i.e., Advent Technologies and NiSource go up and down completely randomly.

Pair Corralation between Advent Technologies and NiSource

Considering the 90-day investment horizon Advent Technologies Holdings is expected to generate 17.71 times more return on investment than NiSource. However, Advent Technologies is 17.71 times more volatile than NiSource. It trades about 0.15 of its potential returns per unit of risk. NiSource is currently generating about 0.25 per unit of risk. If you would invest  309.00  in Advent Technologies Holdings on August 15, 2024 and sell it today you would earn a total of  392.00  from holding Advent Technologies Holdings or generate 126.86% return on investment over 90 days.

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

Advent Technologies Holdings  vs.  NiSource

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.

NiSource

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, NiSource demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Technologies and NiSource

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

The idea behind Advent Technologies Holdings and NiSource 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 CEOs Directory module to screen CEOs from public companies around the world.