Correlation Between Celsius Holdings and Vodka Brands

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

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

Diversification Opportunities for Celsius Holdings and Vodka Brands

-0.57

Correlation Coefficient

Celsius Holdings  Vodka Brands

Excellent diversification

The 3 months correlation between Celsius and Vodka is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Vodka Brands go up and down completely randomly.

Pair Corralation between Celsius Holdings and Vodka Brands

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Vodka Brands. But the stock apears to be less risky and, when comparing its historical volatility, Celsius Holdings is 1.44 times less risky than Vodka Brands. The stock trades about -0.06 of its potential returns per unit of risk. The Vodka Brands Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Vodka Brands Corp on October 10, 2024 and sell it today you would lose (21.00) from holding Vodka Brands Corp or give up 16.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Celsius Holdings  vs.  Vodka Brands Corp

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.

Vodka Brands Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vodka Brands Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Vodka Brands 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 Vodka Brands

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

The idea behind Celsius Holdings and Vodka Brands Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.