Correlation Between PowerCell Sweden and GreenX Metals

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

By analyzing existing cross correlation between PowerCell Sweden AB and GreenX Metals, you can compare the effects of market volatilities on PowerCell Sweden and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerCell Sweden and GreenX Metals.

Diversification Opportunities for PowerCell Sweden and GreenX Metals

-0.75

Correlation Coefficient

PowerCell Sweden  GreenX Metals

Pay attention - limited upside

The 3 months correlation between PowerCell and GreenX is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding PowerCell Sweden AB and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 AB are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of PowerCell Sweden i.e., PowerCell Sweden and GreenX Metals go up and down completely randomly.

Pair Corralation between PowerCell Sweden and GreenX Metals

Assuming the 90 days trading horizon PowerCell Sweden AB is expected to under-perform the GreenX Metals. In addition to that, PowerCell Sweden is 1.91 times more volatile than GreenX Metals. It trades about -0.06 of its total potential returns per unit of risk. GreenX Metals is currently generating about 0.08 per unit of volatility. If you would invest  3,550  in GreenX Metals on December 4, 2024 and sell it today you would earn a total of  300.00  from holding GreenX Metals or generate 8.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

PowerCell Sweden AB  vs.  GreenX Metals

PowerCell Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days PowerCell Sweden AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

GreenX Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, GreenX Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PowerCell Sweden and GreenX Metals

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

The idea behind PowerCell Sweden AB and GreenX Metals 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.