Correlation Between CapitaLand Investment and Celsius Holdings

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

By analyzing existing cross correlation between CapitaLand Investment Limited and Celsius Holdings, you can compare the effects of market volatilities on CapitaLand Investment and Celsius Holdings 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 CapitaLand Investment with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Celsius Holdings.

Diversification Opportunities for CapitaLand Investment and Celsius Holdings

0.69

Correlation Coefficient

CapitaLand Investment  Celsius Holdings

Poor diversification

The 3 months correlation between CapitaLand and Celsius is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and CapitaLand Investment 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 CapitaLand Investment Limited are associated (or correlated) with Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Celsius Holdings go up and down completely randomly.

Pair Corralation between CapitaLand Investment and Celsius Holdings

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 1.24 times more return on investment than Celsius Holdings. However, CapitaLand Investment is 1.24 times more volatile than Celsius Holdings. It trades about 0.02 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.01 per unit of risk. If you would invest  227.00  in CapitaLand Investment Limited on September 23, 2024 and sell it today you would lose (28.00) from holding CapitaLand Investment Limited or give up 12.33% of portfolio value over 90 days.

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

CapitaLand Investment Limited  vs.  Celsius Holdings

CapitaLand Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapitaLand Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with CapitaLand Investment and Celsius Holdings

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

The idea behind CapitaLand Investment Limited and Celsius Holdings 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.