Correlation Between Celsius Holdings and Eq Energy

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

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

Diversification Opportunities for Celsius Holdings and Eq Energy

0.55

Correlation Coefficient

Celsius Holdings  Eq Energy

Very weak diversification

The 3 months correlation between Celsius and EQLB is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Eq Energy Drink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eq Energy Drink 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 Eq Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eq Energy Drink has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Eq Energy go up and down completely randomly.

Pair Corralation between Celsius Holdings and Eq Energy

Given the investment horizon of 90 days Celsius Holdings is expected to generate 5.57 times less return on investment than Eq Energy. But when comparing it to its historical volatility, Celsius Holdings is 4.26 times less risky than Eq Energy. It trades about 0.11 of its potential returns per unit of risk. Eq Energy Drink is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.07  in Eq Energy Drink on December 27, 2024 and sell it today you would earn a total of  0.06  from holding Eq Energy Drink or generate 85.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Celsius Holdings  vs.  Eq Energy Drink

Celsius Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Eq Energy Drink

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eq Energy Drink are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, Eq Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Eq Energy

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

The idea behind Celsius Holdings and Eq Energy Drink 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..