Correlation Between Celsius Holdings and Azure Power

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

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

Diversification Opportunities for Celsius Holdings and Azure Power

-0.42

Correlation Coefficient

Celsius Holdings  Azure Power

Very good diversification

The 3 months correlation between Celsius and Azure is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global 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 Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Azure Power go up and down completely randomly.

Pair Corralation between Celsius Holdings and Azure Power

Given the investment horizon of 90 days Celsius Holdings is expected to generate 4.18 times less return on investment than Azure Power. But when comparing it to its historical volatility, Celsius Holdings is 7.83 times less risky than Azure Power. It trades about 0.14 of its potential returns per unit of risk. Azure Power Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Azure Power Global on May 8, 2025 and sell it today you would lose (5.00) from holding Azure Power Global or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Celsius Holdings  vs.  Azure Power Global

Celsius Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Azure Power Global

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Power Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Azure Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Azure Power

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

The idea behind Celsius Holdings and Azure Power Global 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.