Correlation Between NOHO and Celsius Holdings

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

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

Diversification Opportunities for NOHO and Celsius Holdings

0.14

Correlation Coefficient

NOHO  Celsius Holdings

Average diversification

The 3 months correlation between NOHO and Celsius is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NOHO Inc and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and NOHO 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 NOHO Inc 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 NOHO i.e., NOHO and Celsius Holdings go up and down completely randomly.

Pair Corralation between NOHO and Celsius Holdings

Given the investment horizon of 90 days NOHO Inc is expected to generate 9.08 times more return on investment than Celsius Holdings. However, NOHO is 9.08 times more volatile than Celsius Holdings. It trades about 0.18 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.07 per unit of risk. If you would invest  0.02  in NOHO Inc on December 20, 2024 and sell it today you would lose (0.01) from holding NOHO Inc or give up 50.0% of portfolio value over 90 days.

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

NOHO Inc  vs.  Celsius Holdings

NOHO Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NOHO Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, NOHO disclosed solid returns over the last few months and may actually be approaching a breakup point.

Celsius Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NOHO and Celsius Holdings

The main advantage of trading using opposite NOHO and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOHO 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 NOHO Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .