Correlation Between Integral and Tesla

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

Diversification Opportunities for Integral and Tesla

IntegralTeslaDiversified AwayIntegralTeslaDiversified Away100%
-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Integral and Tesla is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Tesla go up and down completely randomly.

Pair Corralation between Integral and Tesla

Considering the 90-day investment horizon Integral is expected to generate 5.69 times less return on investment than Tesla. But when comparing it to its historical volatility, Integral Ad Science is 1.06 times less risky than Tesla. It trades about 0.01 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  18,771  in Tesla Inc on November 26, 2024 and sell it today you would earn a total of  14,282  from holding Tesla Inc or generate 76.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Integral Ad Science  vs.  Tesla Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15IAS TSLA
       Timeline  
Integral Ad Science 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.5
Tesla Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Tesla Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Tesla is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb340360380400420440460480

Integral and Tesla Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.09-2.31-1.54-0.760.00.751.52.263.02 0.040.060.080.10
JavaScript chart by amCharts 3.21.15IAS TSLA
       Returns  

Pair Trading with Integral and Tesla

The main advantage of trading using opposite Integral and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.
The idea behind Integral Ad Science and Tesla Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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