Correlation Between Tesla and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Tesla and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Tesla and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Advanced Micro.
Diversification Opportunities for Tesla and Advanced Micro
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and Advanced is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Tesla i.e., Tesla and Advanced Micro go up and down completely randomly.
Pair Corralation between Tesla and Advanced Micro
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 1.26 times more return on investment than Advanced Micro. However, Tesla is 1.26 times more volatile than Advanced Micro Devices. It trades about 0.03 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.03 per unit of risk. If you would invest 2,645 in Tesla Inc CDR on August 28, 2024 and sell it today you would earn a total of 442.00 from holding Tesla Inc CDR or generate 16.71% 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. Advanced Micro Devices
Performance |
| Timeline |
| Tesla Inc CDR |
| Advanced Micro Devices |
Tesla and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Advanced Micro
The main advantage of trading using opposite Tesla and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Tesla vs. Western Copper and | Tesla vs. iA Financial | Tesla vs. Canso Credit Trust | Tesla vs. Fairfax Financial Holdings |
| Advanced Micro vs. Lite Access Technologies | Advanced Micro vs. Braille Energy Systems | Advanced Micro vs. iShares Canadian HYBrid | Advanced Micro vs. Altagas Cum Red |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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