Correlation Between Ballard Power and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both Ballard Power 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 Ballard Power and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and Powercell Sweden, you can compare the effects of market volatilities on Ballard Power 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 Ballard Power with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Powercell Sweden.
Diversification Opportunities for Ballard Power and Powercell Sweden
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ballard and Powercell is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and Ballard Power 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 Ballard Power Systems 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 Ballard Power i.e., Ballard Power and Powercell Sweden go up and down completely randomly.
Pair Corralation between Ballard Power and Powercell Sweden
Assuming the 90 days horizon Ballard Power Systems is expected to generate 1.13 times more return on investment than Powercell Sweden. However, Ballard Power is 1.13 times more volatile than Powercell Sweden. It trades about -0.11 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.13 per unit of risk. If you would invest 158.00 in Ballard Power Systems on August 29, 2024 and sell it today you would lose (24.00) from holding Ballard Power Systems or give up 15.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ballard Power Systems vs. Powercell Sweden
Performance |
| Timeline |
| Ballard Power Systems |
| Powercell Sweden |
Ballard Power and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and Powercell Sweden
The main advantage of trading using opposite Ballard Power and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power 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.| Ballard Power vs. Superior Plus Corp | Ballard Power vs. NMI Holdings | Ballard Power vs. Origin Agritech | Ballard Power vs. SIVERS SEMICONDUCTORS AB |
| Powercell Sweden vs. Hyrican Informationssysteme Aktiengesellschaft | Powercell Sweden vs. PUBLIC STORAGE PRFO | Powercell Sweden vs. DATAGROUP SE | Powercell Sweden vs. WESTLAKE CHEMICAL |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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