Correlation Between Tesla and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Tesla and Alamos Gold 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 Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc CDR and Alamos Gold, you can compare the effects of market volatilities on Tesla and Alamos Gold 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 Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Alamos Gold.
Diversification Opportunities for Tesla and Alamos Gold
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and Alamos is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold 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 CDR are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Tesla i.e., Tesla and Alamos Gold go up and down completely randomly.
Pair Corralation between Tesla and Alamos Gold
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 1.86 times more return on investment than Alamos Gold. However, Tesla is 1.86 times more volatile than Alamos Gold. It trades about 0.04 of its potential returns per unit of risk. Alamos Gold is currently generating about 0.08 per unit of risk. If you would invest 2,198 in Tesla Inc CDR on August 31, 2024 and sell it today you would earn a total of 942.00 from holding Tesla Inc CDR or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc CDR vs. Alamos Gold
Performance |
| Timeline |
| Tesla Inc CDR |
| Alamos Gold |
Tesla and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Alamos Gold
The main advantage of trading using opposite Tesla and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Alamos Gold 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Tesla vs. Berkshire Hathaway CDR | Tesla vs. JPMorgan Chase Co | Tesla vs. Bank of America | Tesla vs. Alphabet Inc CDR |
| Alamos Gold vs. SPoT Coffee | Alamos Gold vs. Royal Bank of | Alamos Gold vs. Intact Financial Corp | Alamos Gold vs. Andlauer Healthcare Gr |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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