Correlation Between Alliance Resource and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Alliance Resource 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 Alliance Resource and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Resource Partners and Celsius Holdings, you can compare the effects of market volatilities on Alliance Resource 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 Alliance Resource with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Resource and Celsius Holdings.
Diversification Opportunities for Alliance Resource and Celsius Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliance and Celsius is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Resource Partners and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Alliance Resource 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 Alliance Resource Partners 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 Alliance Resource i.e., Alliance Resource and Celsius Holdings go up and down completely randomly.
Pair Corralation between Alliance Resource and Celsius Holdings
Given the investment horizon of 90 days Alliance Resource is expected to generate 3.83 times less return on investment than Celsius Holdings. But when comparing it to its historical volatility, Alliance Resource Partners is 1.87 times less risky than Celsius Holdings. It trades about 0.04 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,087 in Celsius Holdings on February 12, 2024 and sell it today you would earn a total of 6,194 from holding Celsius Holdings or generate 296.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alliance Resource Partners vs. Celsius Holdings
Performance |
Timeline |
Alliance Resource |
Celsius Holdings |
Alliance Resource and Celsius Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alliance Resource and Celsius Holdings
The main advantage of trading using opposite Alliance Resource and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Resource 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.Alliance Resource vs. Natural Resource Partners | Alliance Resource vs. NACCO Industries | Alliance Resource vs. Indo Tambangraya Megah | Alliance Resource vs. Adaro Energy Tbk |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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