Correlation Between ODDITY Tech and Celsius Holdings

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

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

Diversification Opportunities for ODDITY Tech and Celsius Holdings

-0.58

Correlation Coefficient

ODDITY Tech  Celsius Holdings

Excellent diversification

The 3 months correlation between ODDITY and Celsius is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ODDITY Tech Ltd and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and ODDITY Tech 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 ODDITY Tech Ltd 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 ODDITY Tech i.e., ODDITY Tech and Celsius Holdings go up and down completely randomly.

Pair Corralation between ODDITY Tech and Celsius Holdings

Considering the 90-day investment horizon ODDITY Tech Ltd is expected to generate 14.85 times more return on investment than Celsius Holdings. However, ODDITY Tech is 14.85 times more volatile than Celsius Holdings. It trades about 0.05 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.01 per unit of risk. If you would invest  0.00  in ODDITY Tech Ltd on September 5, 2024 and sell it today you would earn a total of  4,484  from holding ODDITY Tech Ltd or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.85%
Values	Daily Returns

ODDITY Tech Ltd  vs.  Celsius Holdings

ODDITY Tech

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ODDITY Tech Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, ODDITY Tech exhibited 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 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.

Pair Trading with ODDITY Tech and Celsius Holdings

The main advantage of trading using opposite ODDITY Tech and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODDITY Tech 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 ODDITY Tech Ltd 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.