Correlation Between Celsius Holdings and Euronav NV
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Euronav NV 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 Euronav NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Euronav NV, you can compare the effects of market volatilities on Celsius Holdings and Euronav NV 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 Euronav NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Euronav NV.
Diversification Opportunities for Celsius Holdings and Euronav NV
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celsius and Euronav is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Euronav NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronav NV 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 Euronav NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronav NV has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Euronav NV go up and down completely randomly.
Pair Corralation between Celsius Holdings and Euronav NV
Given the investment horizon of 90 days Celsius Holdings is expected to generate 2.26 times more return on investment than Euronav NV. However, Celsius Holdings is 2.26 times more volatile than Euronav NV. It trades about -0.09 of its potential returns per unit of risk. Euronav NV is currently generating about -0.71 per unit of risk. If you would invest 3,069 in Celsius Holdings on August 31, 2024 and sell it today you would lose (232.00) from holding Celsius Holdings or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Euronav NV
Performance |
| Timeline |
| Celsius Holdings |
| Euronav NV |
Celsius Holdings and Euronav NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Euronav NV
The main advantage of trading using opposite Celsius Holdings and Euronav NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Euronav NV 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 Euronav NV will offset losses from the drop in Euronav NV'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 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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