Correlation Between Celsius Holdings and Rocky Mountain

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

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

Diversification Opportunities for Celsius Holdings and Rocky Mountain

0.21

Correlation Coefficient

Celsius Holdings  Rocky Mountain

Modest diversification

The 3 months correlation between Celsius and Rocky is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Rocky Mountain High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain High 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain High has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Rocky Mountain go up and down completely randomly.

Pair Corralation between Celsius Holdings and Rocky Mountain

Given the investment horizon of 90 days Celsius Holdings is expected to generate 0.9 times more return on investment than Rocky Mountain. However, Celsius Holdings is 1.11 times less risky than Rocky Mountain. It trades about 0.01 of its potential returns per unit of risk. Rocky Mountain High is currently generating about -0.01 per unit of risk. If you would invest  2,720  in Celsius Holdings on December 2, 2024 and sell it today you would lose (151.00) from holding Celsius Holdings or give up 5.55% of portfolio value over 90 days.

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

Celsius Holdings  vs.  Rocky Mountain High

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.

Rocky Mountain High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rocky Mountain High are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Rocky Mountain sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Rocky Mountain

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

The idea behind Celsius Holdings and Rocky Mountain High 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.