Correlation Between Celsius Holdings and Catalyst Metals

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

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

Diversification Opportunities for Celsius Holdings and Catalyst Metals

0.47

Correlation Coefficient

Celsius Holdings  Catalyst Metals

Very weak diversification

The 3 months correlation between Celsius and Catalyst is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Catalyst Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Metals 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 Catalyst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Metals has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Catalyst Metals go up and down completely randomly.

Pair Corralation between Celsius Holdings and Catalyst Metals

Given the investment horizon of 90 days Celsius Holdings is expected to generate 1.0 times more return on investment than Catalyst Metals. However, Celsius Holdings is 1.0 times less risky than Catalyst Metals. It trades about -0.06 of its potential returns per unit of risk. Catalyst Metals Limited is currently generating about -0.06 per unit of risk. If you would invest  3,061  in Celsius Holdings on October 11, 2024 and sell it today you would lose (160.00) from holding Celsius Holdings or give up 5.23% 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.  Catalyst Metals 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.

Catalyst Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Celsius Holdings and Catalyst Metals

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

The idea behind Celsius Holdings and Catalyst Metals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.