Correlation Between Credicorp and Tesla
Can any of the company-specific risk be diversified away by investing in both Credicorp and Tesla 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 Credicorp and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credicorp and Tesla Inc, you can compare the effects of market volatilities on Credicorp and Tesla 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 Credicorp with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credicorp and Tesla.
Diversification Opportunities for Credicorp and Tesla
Very weak diversification
The 3 months correlation between Credicorp and Tesla is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Credicorp and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and Credicorp 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 Credicorp are associated (or correlated) with Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of Credicorp i.e., Credicorp and Tesla go up and down completely randomly.
Pair Corralation between Credicorp and Tesla
Assuming the 90 days trading horizon Credicorp is expected to generate 5.73 times less return on investment than Tesla. But when comparing it to its historical volatility, Credicorp is 2.69 times less risky than Tesla. It trades about 0.08 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 418,560 in Tesla Inc on November 2, 2024 and sell it today you would earn a total of 406,952 from holding Tesla Inc or generate 97.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credicorp vs. Tesla Inc
Performance |
| Timeline |
| Credicorp |
| Tesla Inc |
Credicorp and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credicorp and Tesla
The main advantage of trading using opposite Credicorp and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credicorp position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.| Credicorp vs. Grupo Sports World | Credicorp vs. GMxico Transportes SAB | Credicorp vs. Monster Beverage Corp | Credicorp vs. Delta Air Lines |
| Tesla vs. Southwest Airlines | Tesla vs. Monster Beverage Corp | Tesla vs. Samsung Electronics Co | Tesla vs. KB Home |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |