Correlation Between Celsius Holdings and Gentex

Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Gentex 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 Celsius Holdings and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celsius Holdings and Gentex, you can compare the effects of market volatilities on Celsius Holdings and Gentex 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 Celsius Holdings with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Gentex.

Diversification Opportunities for Celsius Holdings and Gentex

0.37

Correlation Coefficient

Celsius Holdings  Gentex

Weak diversification

The 3 months correlation between Celsius and Gentex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and Celsius Holdings 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 Celsius Holdings are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Gentex go up and down completely randomly.

Pair Corralation between Celsius Holdings and Gentex

Given the investment horizon of 90 days Celsius Holdings is expected to generate 5.02 times more return on investment than Gentex. However, Celsius Holdings is 5.02 times more volatile than Gentex. It trades about 0.08 of its potential returns per unit of risk. Gentex is currently generating about 0.15 per unit of risk. If you would invest  7,597  in Celsius Holdings on March 4, 2024 and sell it today you would earn a total of  401.00  from holding Celsius Holdings or generate 5.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Celsius Holdings  vs.  Gentex

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Celsius Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gentex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celsius Holdings and Gentex

The main advantage of trading using opposite Celsius Holdings and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.

The idea behind Celsius Holdings and Gentex 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.