Correlation Between Tesla and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Tesla and Nel ASA 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 Tesla and Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Nel ASA, you can compare the effects of market volatilities on Tesla and Nel ASA 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 Tesla with a short position of Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Nel ASA.
Diversification Opportunities for Tesla and Nel ASA
Pay attention - limited upside
The 3 months correlation between Tesla and Nel is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA and Tesla 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 Tesla Inc are associated (or correlated) with Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Tesla i.e., Tesla and Nel ASA go up and down completely randomly.
Pair Corralation between Tesla and Nel ASA
Assuming the 90 days horizon Tesla Inc is expected to generate 0.52 times more return on investment than Nel ASA. However, Tesla Inc is 1.92 times less risky than Nel ASA. It trades about 0.03 of its potential returns per unit of risk. Nel ASA is currently generating about -0.14 per unit of risk. If you would invest 36,965 in Tesla Inc on November 2, 2024 and sell it today you would earn a total of 490.00 from holding Tesla Inc or generate 1.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tesla Inc vs. Nel ASA
Performance |
Timeline |
Tesla Inc |
Nel ASA |
Tesla and Nel ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tesla and Nel ASA
The main advantage of trading using opposite Tesla and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.Tesla vs. Playa Hotels Resorts | Tesla vs. HYATT HOTELS A | Tesla vs. Chiba Bank | Tesla vs. Sun Life Financial |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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