Correlation Between Celsius Holdings and Anheuser Busch

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

By analyzing existing cross correlation between Celsius Holdings and Anheuser Busch Inbev, you can compare the effects of market volatilities on Celsius Holdings and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Anheuser Busch.

Diversification Opportunities for Celsius Holdings and Anheuser Busch

0.16

Correlation Coefficient

Celsius Holdings  Anheuser Busch

Average diversification

The 3 months correlation between Celsius and Anheuser is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Anheuser Busch go up and down completely randomly.

Pair Corralation between Celsius Holdings and Anheuser Busch

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Anheuser Busch. In addition to that, Celsius Holdings is 3.47 times more volatile than Anheuser Busch Inbev. It trades about -0.02 of its total potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.34 per unit of volatility. If you would invest  4,914  in Anheuser Busch Inbev on December 5, 2024 and sell it today you would earn a total of  1,305  from holding Anheuser Busch Inbev or generate 26.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Celsius Holdings  vs.  Anheuser Busch Inbev

Celsius Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Anheuser Busch Inbev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Anheuser Busch exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Anheuser Busch

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

The idea behind Celsius Holdings and Anheuser Busch Inbev 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.