Correlation Between Advent Technologies and Atlantica Sustainable

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

Diversification Opportunities for Advent Technologies and Atlantica Sustainable

-0.83

Correlation Coefficient

Advent Technologies  Atlantica Sustainable

Pay attention - limited upside

The 3 months correlation between Advent and Atlantica is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Atlantica Sustainable Infrastr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantica Sustainable 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 Atlantica Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantica Sustainable has no effect on the direction of Advent Technologies i.e., Advent Technologies and Atlantica Sustainable go up and down completely randomly.

Pair Corralation between Advent Technologies and Atlantica Sustainable

Assuming the 90 days horizon Advent Technologies Holdings is expected to under-perform the Atlantica Sustainable. In addition to that, Advent Technologies is 3.65 times more volatile than Atlantica Sustainable Infrastructure. It trades about -0.29 of its total potential returns per unit of risk. Atlantica Sustainable Infrastructure is currently generating about 0.26 per unit of volatility. If you would invest  1,758  in Atlantica Sustainable Infrastructure on February 14, 2024 and sell it today you would earn a total of  523.00  from holding Atlantica Sustainable Infrastructure or generate 29.75% return on investment over 90 days.

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

Advent Technologies Holdings  vs.  Atlantica Sustainable Infrastr

Advent Technologies

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Atlantica Sustainable

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantica Sustainable Infrastructure are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Atlantica Sustainable showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Technologies and Atlantica Sustainable

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

The idea behind Advent Technologies Holdings and Atlantica Sustainable Infrastructure 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.