Correlation Between Celsius Holdings and TRAVELERS

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

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

Diversification Opportunities for Celsius Holdings and TRAVELERS

0.68

Correlation Coefficient

Celsius Holdings  TRAVELERS

Poor diversification

The 3 months correlation between Celsius and TRAVELERS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and TRAVELERS PPTY CAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVELERS PPTY CAS 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 TRAVELERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVELERS PPTY CAS has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and TRAVELERS go up and down completely randomly.

Pair Corralation between Celsius Holdings and TRAVELERS

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the TRAVELERS. In addition to that, Celsius Holdings is 4.38 times more volatile than TRAVELERS PPTY CAS. It trades about -0.14 of its total potential returns per unit of risk. TRAVELERS PPTY CAS is currently generating about 0.15 per unit of volatility. If you would invest  10,918  in TRAVELERS PPTY CAS on October 26, 2024 and sell it today you would earn a total of  216.00  from holding TRAVELERS PPTY CAS or generate 1.98% return on investment over 90 days.

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

Celsius Holdings  vs.  TRAVELERS PPTY CAS

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 weak 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.

TRAVELERS PPTY CAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRAVELERS PPTY CAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TRAVELERS 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 TRAVELERS

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

The idea behind Celsius Holdings and TRAVELERS PPTY CAS 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.