Correlation Between Celsius Holdings and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Cincinnati Financial 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 Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Cincinnati Financial, you can compare the effects of market volatilities on Celsius Holdings and Cincinnati Financial 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 Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Cincinnati Financial.
Diversification Opportunities for Celsius Holdings and Cincinnati Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Celsius and Cincinnati is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial 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 Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Celsius Holdings and Cincinnati Financial
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Cincinnati Financial. In addition to that, Celsius Holdings is 1.97 times more volatile than Cincinnati Financial. It trades about -0.11 of its total potential returns per unit of risk. Cincinnati Financial is currently generating about 0.43 per unit of volatility. If you would invest 13,819 in Cincinnati Financial on September 3, 2024 and sell it today you would earn a total of 2,164 from holding Cincinnati Financial or generate 15.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Cincinnati Financial
Performance |
| Timeline |
| Celsius Holdings |
| Cincinnati Financial |
Celsius Holdings and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Cincinnati Financial
The main advantage of trading using opposite Celsius Holdings and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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