Correlation Between Advent Technologies and Ocean Thermal

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

Diversification Opportunities for Advent Technologies and Ocean Thermal

-0.25

Correlation Coefficient

Advent Technologies  Ocean Thermal

Very good diversification

The 3 months correlation between Advent and Ocean is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Advent Technologies Holdings and Ocean Thermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Thermal 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 Ocean Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Thermal Energy has no effect on the direction of Advent Technologies i.e., Advent Technologies and Ocean Thermal go up and down completely randomly.

Pair Corralation between Advent Technologies and Ocean Thermal

If you would invest  0.99  in Advent Technologies Holdings on August 31, 2024 and sell it today you would lose (0.04) from holding Advent Technologies Holdings or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Advent Technologies Holdings  vs.  Ocean Thermal Energy

Advent Technologies

Risk-Adjusted Performance

3 of 100

Weak

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.

Ocean Thermal Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Thermal Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ocean Thermal is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Advent Technologies and Ocean Thermal

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

The idea behind Advent Technologies Holdings and Ocean Thermal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.