Correlation Between Celsius Holdings and KINDER

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

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

Diversification Opportunities for Celsius Holdings and KINDER

0.7

Correlation Coefficient

Celsius Holdings  KINDER

Poor diversification

The 3 months correlation between Celsius and KINDER is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and KINDER MORGAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN ENERGY 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN ENERGY has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and KINDER go up and down completely randomly.

Pair Corralation between Celsius Holdings and KINDER

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the KINDER. In addition to that, Celsius Holdings is 3.52 times more volatile than KINDER MORGAN ENERGY. It trades about -0.1 of its total potential returns per unit of risk. KINDER MORGAN ENERGY is currently generating about -0.02 per unit of volatility. If you would invest  8,934  in KINDER MORGAN ENERGY on October 25, 2024 and sell it today you would lose (89.00) from holding KINDER MORGAN ENERGY or give up 1.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	75.0%
Values	Daily Returns

Celsius Holdings  vs.  KINDER MORGAN ENERGY

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.

KINDER MORGAN ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KINDER MORGAN ENERGY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celsius Holdings and KINDER

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

The idea behind Celsius Holdings and KINDER MORGAN ENERGY 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.