Correlation Between Moderna and Powercell Sweden

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

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

Diversification Opportunities for Moderna and Powercell Sweden

0.47

Correlation Coefficient

Moderna  Powercell Sweden

Very weak diversification

The 3 months correlation between Moderna and Powercell is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and Moderna 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 Moderna are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of Moderna i.e., Moderna and Powercell Sweden go up and down completely randomly.

Pair Corralation between Moderna and Powercell Sweden

Assuming the 90 days horizon Moderna is expected to under-perform the Powercell Sweden. In addition to that, Moderna is 1.28 times more volatile than Powercell Sweden. It trades about -0.08 of its total potential returns per unit of risk. Powercell Sweden is currently generating about -0.07 per unit of volatility. If you would invest  317.00  in Powercell Sweden on December 31, 2024 and sell it today you would lose (65.00) from holding Powercell Sweden or give up 20.5% of portfolio value over 90 days.

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

Moderna  vs.  Powercell Sweden

Moderna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Powercell Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Powercell Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Moderna and Powercell Sweden

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

The idea behind Moderna and Powercell Sweden 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.