Correlation Between Celsius Holdings and Embotelladora Andina
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Embotelladora Andina 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 Celsius Holdings and Embotelladora Andina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Embotelladora Andina SA, you can compare the effects of market volatilities on Celsius Holdings and Embotelladora Andina 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 Celsius Holdings with a short position of Embotelladora Andina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Embotelladora Andina.
Diversification Opportunities for Celsius Holdings and Embotelladora Andina
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celsius and Embotelladora is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Embotelladora Andina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embotelladora Andina and Celsius Holdings 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 Celsius Holdings are associated (or correlated) with Embotelladora Andina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embotelladora Andina has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Embotelladora Andina go up and down completely randomly.
Pair Corralation between Celsius Holdings and Embotelladora Andina
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Embotelladora Andina. In addition to that, Celsius Holdings is 2.96 times more volatile than Embotelladora Andina SA. It trades about -0.09 of its total potential returns per unit of risk. Embotelladora Andina SA is currently generating about 0.03 per unit of volatility. 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 |
Celsius Holdings vs. Embotelladora Andina SA
Performance |
| Timeline |
| Celsius Holdings |
| Embotelladora Andina |
Celsius Holdings and Embotelladora Andina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Embotelladora Andina
The main advantage of trading using opposite Celsius Holdings and Embotelladora Andina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Embotelladora Andina 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 Embotelladora Andina will offset losses from the drop in Embotelladora Andina's long position.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. The Coca Cola | Celsius Holdings vs. Coca Cola Femsa SAB |
| Embotelladora Andina vs. Signet International Holdings | Embotelladora Andina vs. National Beverage Corp | Embotelladora Andina vs. PT Astra International | Embotelladora Andina vs. Vita Coco |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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