Correlation Between Celsius Holdings and Safety Shot

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

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

Diversification Opportunities for Celsius Holdings and Safety Shot

0.44

Correlation Coefficient

Celsius Holdings  Safety Shot

Very weak diversification

The 3 months correlation between Celsius and Safety is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Safety Shot go up and down completely randomly.

Pair Corralation between Celsius Holdings and Safety Shot

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Safety Shot. But the stock apears to be less risky and, when comparing its historical volatility, Celsius Holdings is 5.39 times less risky than Safety Shot. The stock trades about -0.02 of its potential returns per unit of risk. The Safety Shot is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Safety Shot on September 6, 2024 and sell it today you would lose (13.00) from holding Safety Shot or give up 54.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.06%
Values	Daily Returns

Celsius Holdings  vs.  Safety Shot

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 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.

Safety Shot

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safety Shot are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Safety Shot showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Safety Shot

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

The idea behind Celsius Holdings and Safety Shot 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.