Correlation Between Powercell Sweden and Acconeer
Can any of the company-specific risk be diversified away by investing in both Powercell Sweden and Acconeer 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 Acconeer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powercell Sweden and Acconeer AB, you can compare the effects of market volatilities on Powercell Sweden and Acconeer 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 Acconeer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powercell Sweden and Acconeer.
Diversification Opportunities for Powercell Sweden and Acconeer
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Powercell and Acconeer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Powercell Sweden and Acconeer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acconeer AB 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 Acconeer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acconeer AB has no effect on the direction of Powercell Sweden i.e., Powercell Sweden and Acconeer go up and down completely randomly.
Pair Corralation between Powercell Sweden and Acconeer
Assuming the 90 days trading horizon Powercell Sweden is expected to under-perform the Acconeer. In addition to that, Powercell Sweden is 1.31 times more volatile than Acconeer AB. It trades about -0.15 of its total potential returns per unit of risk. Acconeer AB is currently generating about -0.03 per unit of volatility. If you would invest 478.00 in Acconeer AB on October 26, 2024 and sell it today you would lose (10.00) from holding Acconeer AB or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powercell Sweden vs. Acconeer AB
Performance |
| Timeline |
| Powercell Sweden |
| Acconeer AB |
Powercell Sweden and Acconeer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powercell Sweden and Acconeer
The main advantage of trading using opposite Powercell Sweden and Acconeer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powercell Sweden position performs unexpectedly, Acconeer 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 Acconeer will offset losses from the drop in Acconeer's long position.The idea behind Powercell Sweden and Acconeer AB 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.| Acconeer vs. Cantargia AB | Acconeer vs. Fingerprint Cards AB | Acconeer vs. Smart Eye AB | Acconeer vs. Sivers IMA Holding |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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