Correlation Between Celsius Holdings and BW Offshore

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

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

Diversification Opportunities for Celsius Holdings and BW Offshore

-0.42

Correlation Coefficient

Celsius Holdings  BW Offshore

Very good diversification

The 3 months correlation between Celsius and BWOFY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and BW Offshore go up and down completely randomly.

Pair Corralation between Celsius Holdings and BW Offshore

Given the investment horizon of 90 days Celsius Holdings is expected to generate 2.41 times more return on investment than BW Offshore. However, Celsius Holdings is 2.41 times more volatile than BW Offshore Limited. It trades about -0.04 of its potential returns per unit of risk. BW Offshore Limited is currently generating about -0.13 per unit of risk. If you would invest  3,046  in Celsius Holdings on October 23, 2024 and sell it today you would lose (323.00) from holding Celsius Holdings or give up 10.6% of portfolio value over 90 days.

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

Celsius Holdings  vs.  BW Offshore Limited

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

BW Offshore Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BW Offshore Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Celsius Holdings and BW Offshore

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

The idea behind Celsius Holdings and BW Offshore Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.