Correlation Between Celsius Holdings and Ecolab
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Ecolab Inc, you can compare the effects of market volatilities on Celsius Holdings and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Ecolab.
Diversification Opportunities for Celsius Holdings and Ecolab
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Celsius and Ecolab is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Ecolab go up and down completely randomly.
Pair Corralation between Celsius Holdings and Ecolab
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Ecolab. In addition to that, Celsius Holdings is 3.66 times more volatile than Ecolab Inc. It trades about -0.09 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.06 per unit of volatility. If you would invest 22,051 in Ecolab Inc on August 25, 2024 and sell it today you would earn a total of 2,479 from holding Ecolab Inc or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Ecolab Inc
Performance |
| Timeline |
| Celsius Holdings |
| Ecolab Inc |
Celsius Holdings and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Ecolab
The main advantage of trading using opposite Celsius Holdings and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab'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 |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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