Correlation Between Celsius Holdings and Perseus Mining

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

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

Diversification Opportunities for Celsius Holdings and Perseus Mining

0.2

Correlation Coefficient

Celsius Holdings  Perseus Mining

Modest diversification

The 3 months correlation between Celsius and Perseus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Perseus Mining go up and down completely randomly.

Pair Corralation between Celsius Holdings and Perseus Mining

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the Perseus Mining. In addition to that, Celsius Holdings is 1.21 times more volatile than Perseus Mining Limited. It trades about -0.08 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.02 per unit of volatility. If you would invest  165.00  in Perseus Mining Limited on September 3, 2024 and sell it today you would earn a total of  3.00  from holding Perseus Mining Limited or generate 1.82% return on investment over 90 days.

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

Celsius Holdings  vs.  Perseus Mining Limited

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Perseus Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Perseus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Celsius Holdings and Perseus Mining

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

The idea behind Celsius Holdings and Perseus Mining Limited 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.