Correlation Between CDW Corp and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both CDW Corp 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 CDW Corp and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Celsius Holdings, you can compare the effects of market volatilities on CDW Corp 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 CDW Corp with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Celsius Holdings.
Diversification Opportunities for CDW Corp and Celsius Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDW and Celsius is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and CDW Corp 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 CDW 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 CDW Corp i.e., CDW Corp and Celsius Holdings go up and down completely randomly.
Pair Corralation between CDW Corp and Celsius Holdings
Considering the 90-day investment horizon CDW Corp is expected to generate 0.42 times more return on investment than Celsius Holdings. However, CDW Corp is 2.39 times less risky than Celsius Holdings. It trades about 0.02 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.02 per unit of risk. If you would invest 16,718 in CDW Corp on August 31, 2024 and sell it today you would earn a total of 875.00 from holding CDW Corp or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Celsius Holdings
Performance |
| Timeline |
| CDW Corp |
| Celsius Holdings |
CDW Corp and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Celsius Holdings
The main advantage of trading using opposite CDW Corp and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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