Correlation Between Celsius Holdings and Coca Cola

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Can any of the company-specific risk be diversified away by investing in both Celsius Holdings and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celsius Holdings and Coca-Cola, you can compare the effects of market volatilities on Celsius Holdings and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celsius Holdings and Coca Cola.

Diversification Opportunities for Celsius Holdings and Coca Cola

  Correlation Coefficient

Average diversification

The 3 months correlation between Celsius and Coca Cola is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca-Cola has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Coca Cola go up and down completely randomly.

Pair Corralation between Celsius Holdings and Coca Cola

Given the investment horizon of 90 days Celsius Holdings is expected to generate 3.9 times more return on investment than Coca Cola. However, Celsius Holdings is 3.9 times more volatile than Coca-Cola. It trades about 0.0 of its potential returns per unit of risk. Coca-Cola is currently generating about -0.24 per unit of risk. If you would invest  9,862  in Celsius Holdings on July 6, 2022 and sell it today you would lose (427.00)  from holding Celsius Holdings or give up 4.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Celsius Holdings  vs.  Coca-Cola

 Performance (%) 
Celsius Holdings 
Celsius Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, Celsius Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Celsius Price Channel

Coca Cola Performance
0 of 100
Over the last 90 days Coca-Cola has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Coca Cola Price Channel

Celsius Holdings and Coca Cola Volatility Contrast

   Predicted Return Density   

Pair Trading with Celsius Holdings and Coca Cola

The main advantage of trading using opposite Celsius Holdings and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.
Celsius Holdings vs. Amazon Inc
The idea behind Celsius Holdings and Coca-Cola 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.
Coca Cola vs. Amazon Inc
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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