Correlation Between Tesla and United States
Can any of the company-specific risk be diversified away by investing in both Tesla and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and United States Steel, you can compare the effects of market volatilities on Tesla and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and United States.
Diversification Opportunities for Tesla and United States
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tesla and United is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Tesla i.e., Tesla and United States go up and down completely randomly.
Pair Corralation between Tesla and United States
Assuming the 90 days trading horizon Tesla Inc is expected to generate 1.41 times more return on investment than United States. However, Tesla is 1.41 times more volatile than United States Steel. It trades about 0.17 of its potential returns per unit of risk. United States Steel is currently generating about 0.03 per unit of risk. If you would invest 490,108 in Tesla Inc on October 24, 2024 and sell it today you would earn a total of 382,079 from holding Tesla Inc or generate 77.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. United States Steel
Performance |
| Timeline |
| Tesla Inc |
| United States Steel |
Tesla and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and United States
The main advantage of trading using opposite Tesla and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Tesla vs. Deutsche Bank Aktiengesellschaft | Tesla vs. Lloyds Banking Group | Tesla vs. Applied Materials | Tesla vs. The Home Depot |
| United States vs. Capital One Financial | United States vs. Ameriprise Financial | United States vs. GMxico Transportes SAB | United States vs. UnitedHealth Group Incorporated |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |