Correlation Between Celsius Holdings and Kenon Holdings

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

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

Diversification Opportunities for Celsius Holdings and Kenon Holdings

0.28

Correlation Coefficient

Celsius Holdings  Kenon Holdings

Modest diversification

The 3 months correlation between Celsius and Kenon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Kenon Holdings go up and down completely randomly.

Pair Corralation between Celsius Holdings and Kenon Holdings

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Kenon Holdings. In addition to that, Celsius Holdings is 1.05 times more volatile than Kenon Holdings. It trades about -0.18 of its total potential returns per unit of risk. Kenon Holdings is currently generating about -0.09 per unit of volatility. If you would invest  2,365  in Kenon Holdings on January 29, 2024 and sell it today you would lose (140.00) from holding Kenon Holdings or give up 5.92% of portfolio value over 90 days.

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

Celsius Holdings  vs.  Kenon Holdings

Celsius Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 11 (%) 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.

Kenon Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Kenon Holdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Celsius Holdings and Kenon Holdings

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

The idea behind Celsius Holdings and Kenon 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.