Correlation Between Celsius Holdings and CVW CleanTech

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

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

Diversification Opportunities for Celsius Holdings and CVW CleanTech

0.08

Correlation Coefficient

Celsius Holdings  CVW CleanTech

Significant diversification

The 3 months correlation between Celsius and CVW is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech 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 CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and CVW CleanTech go up and down completely randomly.

Pair Corralation between Celsius Holdings and CVW CleanTech

Given the investment horizon of 90 days Celsius Holdings is expected to generate 6.36 times less return on investment than CVW CleanTech. But when comparing it to its historical volatility, Celsius Holdings is 1.84 times less risky than CVW CleanTech. It trades about 0.01 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  70.00  in CVW CleanTech on October 5, 2024 and sell it today you would lose (8.00) from holding CVW CleanTech or give up 11.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Celsius Holdings  vs.  CVW CleanTech

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 fairly strong essential indicators, Celsius Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CVW CleanTech

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CleanTech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, CVW CleanTech is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Celsius Holdings and CVW CleanTech

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

The idea behind Celsius Holdings and CVW CleanTech 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.