Correlation Between Embotelladora Andina and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Embotelladora Andina 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 Embotelladora Andina and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embotelladora Andina SA and Celsius Holdings, you can compare the effects of market volatilities on Embotelladora Andina 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 Embotelladora Andina with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embotelladora Andina and Celsius Holdings.
Diversification Opportunities for Embotelladora Andina and Celsius Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embotelladora and Celsius is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Embotelladora Andina SA and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Embotelladora Andina 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 Embotelladora Andina SA 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 Embotelladora Andina i.e., Embotelladora Andina and Celsius Holdings go up and down completely randomly.
Pair Corralation between Embotelladora Andina and Celsius Holdings
Assuming the 90 days horizon Embotelladora Andina SA is expected to generate 0.34 times more return on investment than Celsius Holdings. However, Embotelladora Andina SA is 2.96 times less risky than Celsius Holdings. It trades about 0.03 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,308 in Embotelladora Andina SA on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Embotelladora Andina SA or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embotelladora Andina SA vs. Celsius Holdings
Performance |
| Timeline |
| Embotelladora Andina |
| Celsius Holdings |
Embotelladora Andina and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embotelladora Andina and Celsius Holdings
The main advantage of trading using opposite Embotelladora Andina and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embotelladora Andina 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.| Embotelladora Andina vs. Signet International Holdings | Embotelladora Andina vs. National Beverage Corp | Embotelladora Andina vs. PT Astra International | Embotelladora Andina vs. Vita Coco |
| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. The Coca Cola | Celsius Holdings vs. Coca Cola Femsa SAB |
Check out your portfolio center.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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