Correlation Between Celsius Holdings and Telia Company
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Telia Company 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 Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Telia Company AB, you can compare the effects of market volatilities on Celsius Holdings and Telia Company 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 Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Telia Company.
Diversification Opportunities for Celsius Holdings and Telia Company
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Celsius and Telia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company 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 Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Telia Company go up and down completely randomly.
Pair Corralation between Celsius Holdings and Telia Company
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Telia Company. In addition to that, Celsius Holdings is 1.37 times more volatile than Telia Company AB. It trades about -0.21 of its total potential returns per unit of risk. Telia Company AB is currently generating about 0.12 per unit of volatility. If you would invest 225.00 in Telia Company AB on August 26, 2024 and sell it today you would earn a total of 85.00 from holding Telia Company AB or generate 37.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.83% |
| Values | Daily Returns |
Celsius Holdings vs. Telia Company AB
Performance |
| Timeline |
| Celsius Holdings |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Celsius Holdings and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Telia Company
The main advantage of trading using opposite Celsius Holdings and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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