Correlation Between Celsius Holdings and Cool

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

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

Diversification Opportunities for Celsius Holdings and Cool

0.44

Correlation Coefficient

Celsius Holdings  Cool

Very weak diversification

The 3 months correlation between Celsius and Cool is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company 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 Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Cool go up and down completely randomly.

Pair Corralation between Celsius Holdings and Cool

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Cool. In addition to that, Celsius Holdings is 1.7 times more volatile than Cool Company. It trades about -0.02 of its total potential returns per unit of risk. Cool Company is currently generating about -0.03 per unit of volatility. If you would invest  1,098  in Cool Company on October 3, 2024 and sell it today you would lose (303.00) from holding Cool Company or give up 27.6% of portfolio value over 90 days.

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

Celsius Holdings  vs.  Cool Company

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 uncertain 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.

Cool Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cool Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Celsius Holdings and Cool

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

The idea behind Celsius Holdings and Cool Company 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.