Correlation Between Celsius Holdings and KinderCare Learning

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

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

Diversification Opportunities for Celsius Holdings and KinderCare Learning

0.58

Correlation Coefficient

Celsius Holdings  KinderCare Learning

Very weak diversification

The 3 months correlation between Celsius and KinderCare is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and KinderCare Learning Companies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KinderCare Learning 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 KinderCare Learning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KinderCare Learning has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and KinderCare Learning go up and down completely randomly.

Pair Corralation between Celsius Holdings and KinderCare Learning

Given the investment horizon of 90 days Celsius Holdings is expected to generate 0.98 times more return on investment than KinderCare Learning. However, Celsius Holdings is 1.02 times less risky than KinderCare Learning. It trades about 0.01 of its potential returns per unit of risk. KinderCare Learning Companies, is currently generating about -0.08 per unit of risk. If you would invest  3,344  in Celsius Holdings on October 22, 2024 and sell it today you would lose (621.00) from holding Celsius Holdings or give up 18.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	14.31%
Values	Daily Returns

Celsius Holdings  vs.  KinderCare Learning Companies,

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

KinderCare Learning

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KinderCare Learning Companies, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential 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 KinderCare Learning

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

The idea behind Celsius Holdings and KinderCare Learning Companies, 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.