Correlation Between Allient and Celsius Holdings

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

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

Diversification Opportunities for Allient and Celsius Holdings

-0.56

Correlation Coefficient

Allient  Celsius Holdings

Excellent diversification

The 3 months correlation between Allient and Celsius is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Allient 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 Allient 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 Allient i.e., Allient and Celsius Holdings go up and down completely randomly.

Pair Corralation between Allient and Celsius Holdings

Given the investment horizon of 90 days Allient is expected to generate 0.68 times more return on investment than Celsius Holdings. However, Allient is 1.47 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 -0.04 per unit of risk. If you would invest  1,890  in Allient on September 25, 2024 and sell it today you would earn a total of  458.00  from holding Allient or generate 24.23% return on investment over 90 days.

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

Allient  vs.  Celsius Holdings

Allient

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Allient and Celsius Holdings

The main advantage of trading using opposite Allient and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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 Allient 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..