Correlation Between Zevia Pbc and Celsius Holdings

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

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

Diversification Opportunities for Zevia Pbc and Celsius Holdings

-0.61

Correlation Coefficient

Zevia Pbc  Celsius Holdings

Excellent diversification

The 3 months correlation between Zevia and Celsius is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zevia Pbc and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Zevia Pbc 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 Zevia Pbc 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 Zevia Pbc i.e., Zevia Pbc and Celsius Holdings go up and down completely randomly.

Pair Corralation between Zevia Pbc and Celsius Holdings

Given the investment horizon of 90 days Zevia Pbc is expected to under-perform the Celsius Holdings. In addition to that, Zevia Pbc is 1.67 times more volatile than Celsius Holdings. It trades about -0.33 of its total potential returns per unit of risk. Celsius Holdings is currently generating about -0.18 per unit of volatility. If you would invest  8,292  in Celsius Holdings on January 28, 2024 and sell it today you would lose (976.00) from holding Celsius Holdings or give up 11.77% of portfolio value over 90 days.

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

Zevia Pbc  vs.  Celsius Holdings

Zevia Pbc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zevia Pbc 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 forward indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Zevia Pbc and Celsius Holdings

The main advantage of trading using opposite Zevia Pbc and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zevia Pbc 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 Zevia Pbc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.