Correlation Between BRP and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both BRP and Celsius Holdings 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 BRP and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Inc and Celsius Holdings, you can compare the effects of market volatilities on BRP and Celsius Holdings 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 BRP with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP and Celsius Holdings.
Diversification Opportunities for BRP and Celsius Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRP and Celsius is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and BRP 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 BRP Inc are associated (or correlated) with Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of BRP i.e., BRP and Celsius Holdings go up and down completely randomly.
Pair Corralation between BRP and Celsius Holdings
Given the investment horizon of 90 days BRP Inc is expected to under-perform the Celsius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 2.57 times less risky than Celsius Holdings. The stock trades about -0.4 of its potential returns per unit of risk. The Celsius Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,538 in Celsius Holdings on November 27, 2024 and sell it today you would earn a total of 599.00 from holding Celsius Holdings or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRP Inc vs. Celsius Holdings
Performance |
| Timeline |
| BRP Inc |
| Celsius Holdings |
BRP and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP and Celsius Holdings
The main advantage of trading using opposite BRP and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP position performs unexpectedly, Celsius Holdings 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 Celsius Holdings will offset losses from the drop in Celsius Holdings' long position.The idea behind BRP Inc and Celsius Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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