Correlation Between Celsius Holdings and Centessa Pharmaceuticals

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

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

Diversification Opportunities for Celsius Holdings and Centessa Pharmaceuticals

-0.66

Correlation Coefficient

Celsius Holdings  Centessa Pharmaceuticals

Excellent diversification

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

Pair Corralation between Celsius Holdings and Centessa Pharmaceuticals

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Centessa Pharmaceuticals. In addition to that, Celsius Holdings is 1.01 times more volatile than Centessa Pharmaceuticals PLC. It trades about -0.08 of its total potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.13 per unit of volatility. If you would invest  1,350  in Centessa Pharmaceuticals PLC on August 31, 2024 and sell it today you would earn a total of  410.00  from holding Centessa Pharmaceuticals PLC or generate 30.37% return on investment over 90 days.

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

Celsius Holdings  vs.  Centessa Pharmaceuticals PLC

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Centessa Pharmaceuticals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Centessa Pharmaceuticals PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Centessa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Centessa Pharmaceuticals

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

The idea behind Celsius Holdings and Centessa Pharmaceuticals PLC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.