Correlation Between Weibo Corp and Celsius Holdings

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Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Celsius Holdings, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Celsius Holdings.

Diversification Opportunities for Weibo Corp and Celsius Holdings

WeiboCelsiusDiversified AwayWeiboCelsiusDiversified Away100%
-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Weibo and Celsius is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Celsius Holdings go up and down completely randomly.

Pair Corralation between Weibo Corp and Celsius Holdings

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.73 times less return on investment than Celsius Holdings. But when comparing it to its historical volatility, Weibo Corp is 2.21 times less risky than Celsius Holdings. It trades about 0.14 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,675  in Celsius Holdings on November 23, 2024 and sell it today you would earn a total of  587.00  from holding Celsius Holdings or generate 21.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Weibo Corp  vs.  Celsius Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-100102030
JavaScript chart by amCharts 3.21.15WB CELH
       Timeline  
Weibo Corp 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Weibo Corp sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb99.51010.51111.5
Celsius Holdings 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22242628303234

Weibo Corp and Celsius Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.26-6.18-4.11-2.040.02.214.496.789.0611.35 0.020.030.040.05
JavaScript chart by amCharts 3.21.15WB CELH
       Returns  

Pair Trading with Weibo Corp and Celsius Holdings

The main advantage of trading using opposite Weibo Corp and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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 Weibo Corp 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.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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