Correlation Between NVent Electric and Advent Technologies
Can any of the company-specific risk be diversified away by investing in both NVent Electric 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 NVent Electric and Advent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nVent Electric PLC and Advent Technologies Holdings, you can compare the effects of market volatilities on NVent Electric 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 NVent Electric with a short position of Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVent Electric and Advent Technologies.
Diversification Opportunities for NVent Electric and Advent Technologies
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NVent and Advent is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding nVent Electric PLC and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies and NVent Electric 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 nVent Electric PLC 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 NVent Electric i.e., NVent Electric and Advent Technologies go up and down completely randomly.
Pair Corralation between NVent Electric and Advent Technologies
Considering the 90-day investment horizon nVent Electric PLC is expected to generate 0.23 times more return on investment than Advent Technologies. However, nVent Electric PLC is 4.43 times less risky than Advent Technologies. It trades about 0.3 of its potential returns per unit of risk. Advent Technologies Holdings is currently generating about 0.06 per unit of risk. If you would invest 5,431 in nVent Electric PLC on April 24, 2025 and sell it today you would earn a total of 2,232 from holding nVent Electric PLC or generate 41.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
nVent Electric PLC vs. Advent Technologies Holdings
Performance |
| Timeline |
| nVent Electric PLC |
| Advent Technologies |
NVent Electric and Advent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVent Electric and Advent Technologies
The main advantage of trading using opposite NVent Electric and Advent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVent Electric 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.| NVent Electric vs. Advanced Energy Industries | NVent Electric vs. Enersys | NVent Electric vs. Hubbell | NVent Electric vs. Acuity Brands |
| Advent Technologies vs. Advent Technologies Holdings | Advent Technologies vs. AgriFORCE Growing Systems | Advent Technologies vs. Azure Power Global | Advent Technologies vs. Ensysce Biosciences |
Check out your portfolio center.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.
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