Correlation Between Relx PLC and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Relx PLC 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 Relx PLC and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relx PLC ADR and Celsius Holdings, you can compare the effects of market volatilities on Relx PLC 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 Relx PLC with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relx PLC and Celsius Holdings.
Diversification Opportunities for Relx PLC and Celsius Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Relx and Celsius is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Relx PLC ADR and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Relx PLC 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 Relx PLC ADR 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 Relx PLC i.e., Relx PLC and Celsius Holdings go up and down completely randomly.
Pair Corralation between Relx PLC and Celsius Holdings
Given the investment horizon of 90 days Relx PLC ADR is expected to generate 0.28 times more return on investment than Celsius Holdings. However, Relx PLC ADR is 3.6 times less risky than Celsius Holdings. It trades about 0.06 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.05 per unit of risk. If you would invest 4,148 in Relx PLC ADR on August 29, 2024 and sell it today you would earn a total of 533.00 from holding Relx PLC ADR or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relx PLC ADR vs. Celsius Holdings
Performance |
| Timeline |
| Relx PLC ADR |
| Celsius Holdings |
Relx PLC and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relx PLC and Celsius Holdings
The main advantage of trading using opposite Relx PLC and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relx PLC 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.| Relx PLC vs. Maximus | Relx PLC vs. CBIZ Inc | Relx PLC vs. First Advantage Corp | Relx PLC vs. Network 1 Technologies |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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