Correlation Between Celsius Holdings and CapitaLand Investment

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

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

Diversification Opportunities for Celsius Holdings and CapitaLand Investment

0.66

Correlation Coefficient

Celsius Holdings  CapitaLand Investment

Poor diversification

The 3 months correlation between Celsius and CapitaLand is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and CapitaLand Investment go up and down completely randomly.

Pair Corralation between Celsius Holdings and CapitaLand Investment

Given the investment horizon of 90 days Celsius Holdings is expected to generate 3.28 times less return on investment than CapitaLand Investment. But when comparing it to its historical volatility, Celsius Holdings is 1.24 times less risky than CapitaLand Investment. It trades about 0.01 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  227.00  in CapitaLand Investment Limited on September 23, 2024 and sell it today you would lose (28.00) from holding CapitaLand Investment Limited or give up 12.33% of portfolio value over 90 days.

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

Celsius Holdings  vs.  CapitaLand Investment 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 weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

CapitaLand Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapitaLand Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Celsius Holdings and CapitaLand Investment

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

The idea behind Celsius Holdings and CapitaLand Investment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.