Correlation Between Celsius Holdings and M Line

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

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

Diversification Opportunities for Celsius Holdings and M Line

-0.64

Correlation Coefficient

Celsius Holdings  M Line

Excellent diversification

The 3 months correlation between Celsius and MLHC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and M Line Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Line Hldgs 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 M Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Line Hldgs has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and M Line go up and down completely randomly.

Pair Corralation between Celsius Holdings and M Line

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the M Line. But the stock apears to be less risky and, when comparing its historical volatility, Celsius Holdings is 25.03 times less risky than M Line. The stock trades about -0.04 of its potential returns per unit of risk. The M Line Hldgs is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.00  in M Line Hldgs on December 2, 2024 and sell it today you would earn a total of  0.01  from holding M Line Hldgs or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.68%
Values	Daily Returns

Celsius Holdings  vs.  M Line Hldgs

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.

M Line Hldgs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in M Line Hldgs are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, M Line exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and M Line

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

The idea behind Celsius Holdings and M Line Hldgs 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.