Correlation Between Ceres Power and PowerCell Sweden

Can any of the company-specific risk be diversified away by investing in both Ceres 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 Ceres 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 Ceres Power Holdings and PowerCell Sweden AB, you can compare the effects of market volatilities on Ceres 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 Ceres Power with a short position of PowerCell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceres Power and PowerCell Sweden.

Diversification Opportunities for Ceres Power and PowerCell Sweden

0.54

Correlation Coefficient

Ceres Power  PowerCell Sweden

Very weak diversification

The 3 months correlation between Ceres and PowerCell is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ceres Power Holdings and PowerCell Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerCell Sweden and Ceres 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 Ceres Power Holdings 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 Ceres Power i.e., Ceres Power and PowerCell Sweden go up and down completely randomly.

Pair Corralation between Ceres Power and PowerCell Sweden

Assuming the 90 days horizon Ceres Power Holdings is expected to generate 0.81 times more return on investment than PowerCell Sweden. However, Ceres Power Holdings is 1.23 times less risky than PowerCell Sweden. It trades about 0.11 of its potential returns per unit of risk. PowerCell Sweden AB is currently generating about 0.08 per unit of risk. If you would invest  104.00  in Ceres Power Holdings on May 14, 2025 and sell it today you would earn a total of  50.00  from holding Ceres Power Holdings or generate 48.08% return on investment over 90 days.

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

Ceres Power Holdings  vs.  PowerCell Sweden AB

Ceres Power Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ceres Power Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Ceres Power reported solid returns over the last few months and may actually be approaching a breakup point.

PowerCell Sweden

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in PowerCell Sweden AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, PowerCell Sweden reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceres Power and PowerCell Sweden

The main advantage of trading using opposite Ceres Power and PowerCell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceres 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.

The idea behind Ceres Power Holdings and PowerCell Sweden 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..