Correlation Between Coca Cola and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Celsius Holdings, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Celsius Holdings.
Diversification Opportunities for Coca Cola and Celsius Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coca and Celsius is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Celsius Holdings go up and down completely randomly.
Pair Corralation between Coca Cola and Celsius Holdings
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.22 times more return on investment than Celsius Holdings. However, The Coca Cola is 4.47 times less risky than Celsius Holdings. It trades about -0.17 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.11 per unit of risk. If you would invest 7,036 in The Coca Cola on August 24, 2024 and sell it today you would lose (660.00) from holding The Coca Cola or give up 9.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Celsius Holdings
Performance |
| Timeline |
| Coca Cola |
| Celsius Holdings |
Coca Cola and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Celsius Holdings
The main advantage of trading using opposite Coca Cola and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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