Correlation Between Powercell Sweden and PNE AG

Can any of the company-specific risk be diversified away by investing in both Powercell Sweden and PNE AG 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 Powercell Sweden and PNE AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Powercell Sweden and PNE AG, you can compare the effects of market volatilities on Powercell Sweden and PNE AG 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 Powercell Sweden with a short position of PNE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powercell Sweden and PNE AG.

Diversification Opportunities for Powercell Sweden and PNE AG

-0.08

Correlation Coefficient

Powercell Sweden  PNE AG

Good diversification

The 3 months correlation between Powercell and PNE is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Powercell Sweden and PNE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNE AG and Powercell Sweden 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 Powercell Sweden are associated (or correlated) with PNE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNE AG has no effect on the direction of Powercell Sweden i.e., Powercell Sweden and PNE AG go up and down completely randomly.

Pair Corralation between Powercell Sweden and PNE AG

Assuming the 90 days trading horizon Powercell Sweden is expected to generate 3.94 times more return on investment than PNE AG. However, Powercell Sweden is 3.94 times more volatile than PNE AG. It trades about 0.13 of its potential returns per unit of risk. PNE AG is currently generating about 0.0 per unit of risk. If you would invest  2,628  in Powercell Sweden on April 24, 2025 and sell it today you would earn a total of  900.00  from holding Powercell Sweden or generate 34.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Powercell Sweden  vs.  PNE AG

Powercell Sweden

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Powercell Sweden are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Powercell Sweden unveiled solid returns over the last few months and may actually be approaching a breakup point.

PNE AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days PNE AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PNE AG 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 Powercell Sweden and PNE AG

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

The idea behind Powercell Sweden and PNE AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.