Correlation Between Vodka Brands and Celsius Holdings

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

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

Diversification Opportunities for Vodka Brands and Celsius Holdings

-0.48

Correlation Coefficient

Vodka Brands  Celsius Holdings

Very good diversification

The 3 months correlation between Vodka and Celsius is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Celsius Holdings go up and down completely randomly.

Pair Corralation between Vodka Brands and Celsius Holdings

Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 2.32 times more return on investment than Celsius Holdings. However, Vodka Brands is 2.32 times more volatile than Celsius Holdings. It trades about 0.03 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.01 per unit of risk. If you would invest  177.00  in Vodka Brands Corp on September 23, 2024 and sell it today you would lose (70.00) from holding Vodka Brands Corp or give up 39.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Vodka Brands Corp  vs.  Celsius Holdings

Vodka Brands Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

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 Vodka Brands and Celsius Holdings

The main advantage of trading using opposite Vodka Brands and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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 Vodka Brands Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.