Correlation Between Tesla and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both Tesla and LUMI GRUPPEN 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 LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and LUMI GRUPPEN AS, you can compare the effects of market volatilities on Tesla and LUMI GRUPPEN 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 LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and LUMI GRUPPEN.
Diversification Opportunities for Tesla and LUMI GRUPPEN
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tesla and LUMI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS 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 LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of Tesla i.e., Tesla and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between Tesla and LUMI GRUPPEN
Assuming the 90 days trading horizon Tesla Inc is expected to generate 0.57 times more return on investment than LUMI GRUPPEN. However, Tesla Inc is 1.75 times less risky than LUMI GRUPPEN. It trades about 0.34 of its potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about 0.14 per unit of risk. If you would invest 33,750 in Tesla Inc on September 24, 2024 and sell it today you would earn a total of 8,675 from holding Tesla Inc or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| Tesla Inc |
| LUMI GRUPPEN AS |
Tesla and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and LUMI GRUPPEN
The main advantage of trading using opposite Tesla and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.The idea behind Tesla Inc and LUMI GRUPPEN AS 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.| LUMI GRUPPEN vs. LG Display Co | LUMI GRUPPEN vs. CHEMICAL INDUSTRIES | LUMI GRUPPEN vs. NISSAN CHEMICAL IND | LUMI GRUPPEN vs. Nissan Chemical Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |