Correlation Between Helium and CEL

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

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

Diversification Opportunities for Helium and CEL

-0.24

Correlation Coefficient

Helium  CEL

Very good diversification

The 3 months correlation between Helium and CEL is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Helium and CEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEL and Helium 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 Helium are associated (or correlated) with CEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEL has no effect on the direction of Helium i.e., Helium and CEL go up and down completely randomly.

Pair Corralation between Helium and CEL

Assuming the 90 days trading horizon Helium is expected to generate 16.31 times less return on investment than CEL. But when comparing it to its historical volatility, Helium is 3.64 times less risky than CEL. It trades about 0.03 of its potential returns per unit of risk. CEL is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  14.00  in CEL on September 1, 2024 and sell it today you would earn a total of  15.00  from holding CEL or generate 107.14% return on investment over 90 days.

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

Helium  vs.  CEL

Helium

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Helium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Helium may actually be approaching a critical reversion point that can send shares even higher in December 2024.

CEL

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CEL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, CEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helium and CEL

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

The idea behind Helium and CEL 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.