Correlation Between Southwest Gas and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Southwest Gas 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 Southwest Gas and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Gas Holdings and Celsius Holdings, you can compare the effects of market volatilities on Southwest Gas 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 Southwest Gas with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Gas and Celsius Holdings.
Diversification Opportunities for Southwest Gas and Celsius Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southwest and Celsius is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Gas Holdings and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Southwest Gas 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 Southwest Gas Holdings 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 Southwest Gas i.e., Southwest Gas and Celsius Holdings go up and down completely randomly.
Pair Corralation between Southwest Gas and Celsius Holdings
Considering the 90-day investment horizon Southwest Gas Holdings is expected to under-perform the Celsius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Southwest Gas Holdings is 2.78 times less risky than Celsius Holdings. The stock trades about -0.11 of its potential returns per unit of risk. The Celsius Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,704 in Celsius Holdings on September 14, 2024 and sell it today you would earn a total of 495.00 from holding Celsius Holdings or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Southwest Gas Holdings vs. Celsius Holdings
Performance |
| Timeline |
| Southwest Gas Holdings |
| Celsius Holdings |
Southwest Gas and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Gas and Celsius Holdings
The main advantage of trading using opposite Southwest Gas and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Gas 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.| Southwest Gas vs. NewJersey Resources | Southwest Gas vs. Northwest Natural Gas | Southwest Gas vs. NorthWestern | Southwest Gas vs. Chesapeake Utilities |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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