Correlation Between Celsius Holdings and National Beverage
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and National Beverage Corp, you can compare the effects of market volatilities on Celsius Holdings and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and National Beverage.
Diversification Opportunities for Celsius Holdings and National Beverage
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Celsius and National is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and National Beverage go up and down completely randomly.
Pair Corralation between Celsius Holdings and National Beverage
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the National Beverage. In addition to that, Celsius Holdings is 2.61 times more volatile than National Beverage Corp. It trades about -0.07 of its total potential returns per unit of risk. National Beverage Corp is currently generating about -0.05 per unit of volatility. If you would invest 4,616 in National Beverage Corp on November 2, 2024 and sell it today you would lose (388.00) from holding National Beverage Corp or give up 8.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. National Beverage Corp
Performance |
| Timeline |
| Celsius Holdings |
| National Beverage Corp |
Celsius Holdings and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and National Beverage
The main advantage of trading using opposite Celsius Holdings and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage'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 |
| National Beverage vs. PepsiCo | National Beverage vs. Vita Coco | National Beverage vs. Aquagold International | National Beverage vs. Thrivent High Yield |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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