Correlation Between Celsius Holdings and Nongfu Spring

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

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

Diversification Opportunities for Celsius Holdings and Nongfu Spring

0.79

Correlation Coefficient

Celsius Holdings  Nongfu Spring

Poor diversification

The 3 months correlation between Celsius and Nongfu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Nongfu Spring Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nongfu Spring 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 Nongfu Spring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nongfu Spring has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Nongfu Spring go up and down completely randomly.

Pair Corralation between Celsius Holdings and Nongfu Spring

Given the investment horizon of 90 days Celsius Holdings is expected to generate 8.42 times more return on investment than Nongfu Spring. However, Celsius Holdings is 8.42 times more volatile than Nongfu Spring Co. It trades about 0.09 of its potential returns per unit of risk. Nongfu Spring Co is currently generating about 0.08 per unit of risk. If you would invest  2,768  in Celsius Holdings on December 26, 2024 and sell it today you would earn a total of  680.00  from holding Celsius Holdings or generate 24.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Celsius Holdings  vs.  Nongfu Spring Co

Celsius Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 7 (%) 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.

Nongfu Spring

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nongfu Spring Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Nongfu Spring is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Celsius Holdings and Nongfu Spring

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

The idea behind Celsius Holdings and Nongfu Spring Co 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.