Correlation Between Microvast Holdings and PowerCell Sweden

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

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

Diversification Opportunities for Microvast Holdings and PowerCell Sweden

-0.56

Correlation Coefficient

Microvast Holdings  PowerCell Sweden

Excellent diversification

The 3 months correlation between Microvast and PowerCell is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microvast 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 Microvast Holdings 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 Microvast 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 Microvast Holdings i.e., Microvast Holdings and PowerCell Sweden go up and down completely randomly.

Pair Corralation between Microvast Holdings and PowerCell Sweden

Given the investment horizon of 90 days Microvast Holdings is expected to generate 68.4 times less return on investment than PowerCell Sweden. But when comparing it to its historical volatility, Microvast Holdings is 2.17 times less risky than PowerCell Sweden. It trades about 0.0 of its potential returns per unit of risk. PowerCell Sweden AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  264.00  in PowerCell Sweden AB on May 13, 2025 and sell it today you would earn a total of  52.00  from holding PowerCell Sweden AB or generate 19.7% return on investment over 90 days.

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

Microvast Holdings  vs.  PowerCell Sweden AB

Microvast Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Microvast Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Microvast Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 5 (%) 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 Microvast Holdings and PowerCell Sweden

The main advantage of trading using opposite Microvast Holdings and PowerCell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings 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 Microvast 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.