Correlation Between Kandi Technologies and Tesla
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies 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 Kandi Technologies and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and Tesla Inc, you can compare the effects of market volatilities on Kandi Technologies 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 Kandi Technologies with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Tesla.
Diversification Opportunities for Kandi Technologies and Tesla
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kandi and Tesla is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Tesla go up and down completely randomly.
Pair Corralation between Kandi Technologies and Tesla
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Tesla. But the stock apears to be less risky and, when comparing its historical volatility, Kandi Technologies Group is 1.02 times less risky than Tesla. The stock trades about -0.11 of its potential returns per unit of risk. The Tesla Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 26,251 in Tesla Inc on August 28, 2024 and sell it today you would earn a total of 7,608 from holding Tesla Inc or generate 28.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Tesla Inc
Performance |
| Timeline |
| Kandi Technologies |
| Tesla Inc |
Kandi Technologies and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Tesla
The main advantage of trading using opposite Kandi Technologies and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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.| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye 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 the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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