Correlation Between Celsius Holdings and BJs Restaurants

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

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

Diversification Opportunities for Celsius Holdings and BJs Restaurants

-0.17

Correlation Coefficient

Celsius Holdings  BJs Restaurants

Good diversification

The 3 months correlation between Celsius and BJs is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Celsius 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 Celsius Holdings are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and BJs Restaurants go up and down completely randomly.

Pair Corralation between Celsius Holdings and BJs Restaurants

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the BJs Restaurants. In addition to that, Celsius Holdings is 1.67 times more volatile than BJs Restaurants. It trades about -0.06 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.09 per unit of volatility. If you would invest  3,548  in BJs Restaurants on October 8, 2024 and sell it today you would earn a total of  119.00  from holding BJs Restaurants or generate 3.35% return on investment over 90 days.

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

Celsius Holdings  vs.  BJs Restaurants

Celsius Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Celsius Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

BJs Restaurants

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BJs Restaurants demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and BJs Restaurants

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

The idea behind Celsius Holdings and BJs Restaurants 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.