Correlation Between Celsius Holdings and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Naked Wines 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 Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Naked Wines plc, you can compare the effects of market volatilities on Celsius Holdings and Naked Wines 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Naked Wines.
Diversification Opportunities for Celsius Holdings and Naked Wines
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Celsius and Naked is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Naked Wines go up and down completely randomly.
Pair Corralation between Celsius Holdings and Naked Wines
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Naked Wines. In addition to that, Celsius Holdings is 2.69 times more volatile than Naked Wines plc. It trades about -0.1 of its total potential returns per unit of risk. Naked Wines plc is currently generating about -0.05 per unit of volatility. If you would invest 286.00 in Naked Wines plc on August 29, 2024 and sell it today you would lose (15.00) from holding Naked Wines plc or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Celsius Holdings vs. Naked Wines plc
Performance |
| Timeline |
| Celsius Holdings |
| Naked Wines plc |
Celsius Holdings and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Naked Wines
The main advantage of trading using opposite Celsius Holdings and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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