Correlation Between Celsius Holdings and Western Asset

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

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

Diversification Opportunities for Celsius Holdings and Western Asset

-0.04

Correlation Coefficient

Celsius Holdings  Western Asset

Good diversification

The 3 months correlation between Celsius and Western is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Western Asset go up and down completely randomly.

Pair Corralation between Celsius Holdings and Western Asset

Given the investment horizon of 90 days Celsius Holdings is expected to generate 21.8 times more return on investment than Western Asset. However, Celsius Holdings is 21.8 times more volatile than Western Asset Investment. It trades about 0.09 of its potential returns per unit of risk. Western Asset Investment is currently generating about 0.14 per unit of risk. If you would invest  2,376  in Celsius Holdings on December 4, 2024 and sell it today you would earn a total of  223.00  from holding Celsius Holdings or generate 9.39% return on investment over 90 days.

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

Celsius Holdings  vs.  Western Asset Investment

Celsius Holdings

Risk-Adjusted Performance

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.

Western Asset Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Western Asset is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Celsius Holdings and Western Asset

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

The idea behind Celsius Holdings and Western Asset Investment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.