Correlation Between Powercell Sweden and CureVac NV

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

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

Diversification Opportunities for Powercell Sweden and CureVac NV

0.59

Correlation Coefficient

Powercell Sweden  CureVac NV

Very weak diversification

The 3 months correlation between Powercell and CureVac is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Powercell Sweden and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Powercell Sweden i.e., Powercell Sweden and CureVac NV go up and down completely randomly.

Pair Corralation between Powercell Sweden and CureVac NV

Assuming the 90 days horizon Powercell Sweden is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, Powercell Sweden is 1.0 times less risky than CureVac NV. The stock trades about -0.07 of its potential returns per unit of risk. The CureVac NV is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  330.00  in CureVac NV on December 31, 2024 and sell it today you would lose (53.00) from holding CureVac NV or give up 16.06% of portfolio value over 90 days.

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

Powercell Sweden  vs.  CureVac NV

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.

CureVac NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days CureVac NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Powercell Sweden and CureVac NV

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

The idea behind Powercell Sweden and CureVac NV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.