Correlation Between Safety Shot and Celsius Holdings

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

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

Diversification Opportunities for Safety Shot and Celsius Holdings

0.61

Correlation Coefficient

Safety Shot  Celsius Holdings

Poor diversification

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

Pair Corralation between Safety Shot and Celsius Holdings

Given the investment horizon of 90 days Safety Shot is expected to under-perform the Celsius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Safety Shot is 1.0 times less risky than Celsius Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The Celsius Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,837  in Celsius Holdings on September 28, 2024 and sell it today you would lose (69.00) from holding Celsius Holdings or give up 2.43% of portfolio value over 90 days.

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

Safety Shot  vs.  Celsius Holdings

Safety Shot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 Safety Shot and Celsius Holdings

The main advantage of trading using opposite Safety Shot and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot 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 Safety Shot 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.