Correlation Between Celsius Holdings and EON Resources

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

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

Diversification Opportunities for Celsius Holdings and EON Resources

0.53

Correlation Coefficient

Celsius Holdings  EON Resources

Very weak diversification

The 3 months correlation between Celsius and EON is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and EON Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON Resources 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 EON Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON Resources has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and EON Resources go up and down completely randomly.

Pair Corralation between Celsius Holdings and EON Resources

Given the investment horizon of 90 days Celsius Holdings is expected to generate 0.53 times more return on investment than EON Resources. However, Celsius Holdings is 1.88 times less risky than EON Resources. It trades about -0.04 of its potential returns per unit of risk. EON Resources is currently generating about -0.12 per unit of risk. If you would invest  3,173  in Celsius Holdings on October 6, 2024 and sell it today you would lose (293.00) from holding Celsius Holdings or give up 9.23% 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.  EON Resources

Celsius Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

EON Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Celsius Holdings and EON Resources

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

The idea behind Celsius Holdings and EON Resources 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..