Correlation Between Weibo Corp and Celsius Holdings
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Weibo Corp vs. Celsius Holdings
Performance |
Timeline |
Weibo Corp |
Celsius Holdings |
Weibo Corp and Celsius Holdings Volatility Contrast
Predicted Return Density |
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.Weibo Corp vs. YY Inc Class | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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