Correlation Between Celsius Holdings and KLA Tencor

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

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

Diversification Opportunities for Celsius Holdings and KLA Tencor

0.54

Correlation Coefficient

Celsius Holdings  KLA Tencor

Very weak diversification

The 3 months correlation between Celsius and KLA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and KLA Tencor go up and down completely randomly.

Pair Corralation between Celsius Holdings and KLA Tencor

Given the investment horizon of 90 days Celsius Holdings is expected to generate 2.65 times more return on investment than KLA Tencor. However, Celsius Holdings is 2.65 times more volatile than KLA Tencor. It trades about 0.06 of its potential returns per unit of risk. KLA Tencor is currently generating about 0.08 per unit of risk. If you would invest  2,789  in Celsius Holdings on October 6, 2024 and sell it today you would earn a total of  91.00  from holding Celsius Holdings or generate 3.26% return on investment over 90 days.

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

Celsius Holdings  vs.  KLA Tencor

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.

KLA Tencor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLA Tencor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Celsius Holdings and KLA Tencor

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

The idea behind Celsius Holdings and KLA Tencor 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.