Correlation Between Celsius Holdings and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Boston Beer 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 Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Boston Beer, you can compare the effects of market volatilities on Celsius Holdings and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Boston Beer.
Diversification Opportunities for Celsius Holdings and Boston Beer
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Celsius and Boston is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Boston Beer go up and down completely randomly.
Pair Corralation between Celsius Holdings and Boston Beer
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Boston Beer. In addition to that, Celsius Holdings is 2.18 times more volatile than Boston Beer. It trades about -0.07 of its total potential returns per unit of risk. Boston Beer is currently generating about 0.13 per unit of volatility. If you would invest 30,433 in Boston Beer on August 28, 2024 and sell it today you would earn a total of 1,098 from holding Boston Beer or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Boston Beer
Performance |
| Timeline |
| Celsius Holdings |
| Boston Beer |
Celsius Holdings and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Boston Beer
The main advantage of trading using opposite Celsius Holdings and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer'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 |
| Boston Beer vs. Budweiser Brewing | Boston Beer vs. Anheuser Busch InBev SANV | Boston Beer vs. Ambev SA ADR | Boston Beer vs. Fomento Economico Mexicano |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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