Correlation Between Celsius Holdings and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Southwest Airlines 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 Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Southwest Airlines, you can compare the effects of market volatilities on Celsius Holdings and Southwest Airlines 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 Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Southwest Airlines.
Diversification Opportunities for Celsius Holdings and Southwest Airlines
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Celsius and Southwest is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Southwest Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines 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 Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Southwest Airlines go up and down completely randomly.
Pair Corralation between Celsius Holdings and Southwest Airlines
Given the investment horizon of 90 days Celsius Holdings is expected to generate 1.03 times less return on investment than Southwest Airlines. In addition to that, Celsius Holdings is 1.67 times more volatile than Southwest Airlines. It trades about 0.0 of its total potential returns per unit of risk. Southwest Airlines is currently generating about 0.0 per unit of volatility. If you would invest 3,645 in Southwest Airlines on September 4, 2024 and sell it today you would lose (345.00) from holding Southwest Airlines or give up 9.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Southwest Airlines
Performance |
| Timeline |
| Celsius Holdings |
| Southwest Airlines |
Celsius Holdings and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Southwest Airlines
The main advantage of trading using opposite Celsius Holdings and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Southwest Airlines 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 Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
| Southwest Airlines vs. Delta Air Lines | Southwest Airlines vs. United Airlines Holdings | Southwest Airlines vs. Frontier Group Holdings |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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