Correlation Between Celsius Holdings and Axalta Coating

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

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

Diversification Opportunities for Celsius Holdings and Axalta Coating

-0.7

Correlation Coefficient

Celsius Holdings  Axalta Coating

Excellent diversification

The 3 months correlation between Celsius and Axalta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems 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 Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Axalta Coating go up and down completely randomly.

Pair Corralation between Celsius Holdings and Axalta Coating

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Axalta Coating. In addition to that, Celsius Holdings is 2.26 times more volatile than Axalta Coating Systems. It trades about 0.0 of its total potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.11 per unit of volatility. If you would invest  3,480  in Axalta Coating Systems on September 13, 2024 and sell it today you would earn a total of  427.00  from holding Axalta Coating Systems or generate 12.27% return on investment over 90 days.

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

Celsius Holdings  vs.  Axalta Coating Systems

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Axalta Coating Systems

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axalta Coating Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Axalta Coating may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Celsius Holdings and Axalta Coating

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

The idea behind Celsius Holdings and Axalta Coating Systems 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.