Correlation Between Celsius Holdings and Willamette Valley

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

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

Diversification Opportunities for Celsius Holdings and Willamette Valley

-0.02

Correlation Coefficient

Celsius Holdings  Willamette Valley

Good diversification

The 3 months correlation between Celsius and Willamette is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Willamette Valley go up and down completely randomly.

Pair Corralation between Celsius Holdings and Willamette Valley

Given the investment horizon of 90 days Celsius Holdings is expected to generate 1.64 times more return on investment than Willamette Valley. However, Celsius Holdings is 1.64 times more volatile than Willamette Valley Vineyards. It trades about 0.16 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.08 per unit of risk. If you would invest  4,951  in Celsius Holdings on February 28, 2024 and sell it today you would earn a total of  4,564  from holding Celsius Holdings or generate 92.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Celsius Holdings  vs.  Willamette Valley Vineyards

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 uncertain essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Willamette Valley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Willamette Valley Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Celsius Holdings and Willamette Valley

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

The idea behind Celsius Holdings and Willamette Valley Vineyards 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.