Correlation Between Celsius Holdings and NRG Energy
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and NRG Energy 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 NRG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and NRG Energy, you can compare the effects of market volatilities on Celsius Holdings and NRG Energy 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 NRG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and NRG Energy.
Diversification Opportunities for Celsius Holdings and NRG Energy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Celsius and NRG is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and NRG Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 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 NRG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and NRG Energy go up and down completely randomly.
Pair Corralation between Celsius Holdings and NRG Energy
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the NRG Energy. In addition to that, Celsius Holdings is 1.51 times more volatile than NRG Energy. It trades about -0.11 of its total potential returns per unit of risk. NRG Energy is currently generating about 0.08 per unit of volatility. If you would invest 7,777 in NRG Energy on September 14, 2024 and sell it today you would earn a total of 1,820 from holding NRG Energy or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Celsius Holdings vs. NRG Energy
Performance |
| Timeline |
| Celsius Holdings |
| NRG Energy |
Celsius Holdings and NRG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and NRG Energy
The main advantage of trading using opposite Celsius Holdings and NRG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, NRG Energy 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 NRG Energy will offset losses from the drop in NRG Energy'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 |
| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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