Correlation Between Playstudios and Celsius Holdings

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

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

Diversification Opportunities for Playstudios and Celsius Holdings

-0.46

Correlation Coefficient

Playstudios  Celsius Holdings

Very good diversification

The 3 months correlation between Playstudios and Celsius is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Playstudios 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 Playstudios 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 Playstudios i.e., Playstudios and Celsius Holdings go up and down completely randomly.

Pair Corralation between Playstudios and Celsius Holdings

Given the investment horizon of 90 days Playstudios is expected to under-perform the Celsius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Playstudios is 1.4 times less risky than Celsius Holdings. The stock trades about -0.12 of its potential returns per unit of risk. The Celsius Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,585  in Celsius Holdings on December 29, 2024 and sell it today you would earn a total of  930.00  from holding Celsius Holdings or generate 35.98% return on investment over 90 days.

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

Playstudios  vs.  Celsius Holdings

Playstudios

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playstudios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Celsius Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 9 (%) 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 Playstudios and Celsius Holdings

The main advantage of trading using opposite Playstudios and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios 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 Playstudios 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.