Correlation Between Celsius Holdings and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Westrock Coffee 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 Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Westrock Coffee, you can compare the effects of market volatilities on Celsius Holdings and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Westrock Coffee.
Diversification Opportunities for Celsius Holdings and Westrock Coffee
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Celsius and Westrock is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Westrock Coffee go up and down completely randomly.
Pair Corralation between Celsius Holdings and Westrock Coffee
Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Westrock Coffee. In addition to that, Celsius Holdings is 1.46 times more volatile than Westrock Coffee. It trades about -0.02 of its total potential returns per unit of risk. Westrock Coffee is currently generating about -0.02 per unit of volatility. If you would invest 1,130 in Westrock Coffee on September 1, 2024 and sell it today you would lose (327.00) from holding Westrock Coffee or give up 28.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celsius Holdings vs. Westrock Coffee
Performance |
| Timeline |
| Celsius Holdings |
| Westrock Coffee |
Celsius Holdings and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celsius Holdings and Westrock Coffee
The main advantage of trading using opposite Celsius Holdings and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee'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 |
| Westrock Coffee vs. General Mills | Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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