Correlation Between Amgen and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Celsius Holdings, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Celsius Holdings.
Diversification Opportunities for Amgen and Celsius Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and Celsius is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Amgen 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 Amgen 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 Amgen i.e., Amgen and Celsius Holdings go up and down completely randomly.
Pair Corralation between Amgen and Celsius Holdings
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.43 times more return on investment than Celsius Holdings. However, Amgen Inc is 2.34 times less risky than Celsius Holdings. It trades about -0.13 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.08 per unit of risk. If you would invest 32,789 in Amgen Inc on September 2, 2024 and sell it today you would lose (4,502) from holding Amgen Inc or give up 13.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Celsius Holdings
Performance |
| Timeline |
| Amgen Inc |
| Celsius Holdings |
Amgen and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Celsius Holdings
The main advantage of trading using opposite Amgen and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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 Amgen 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.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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