Correlation Between Tesla and Automotive Properties
Can any of the company-specific risk be diversified away by investing in both Tesla and Automotive Properties 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 Automotive Properties 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 Automotive Properties Real, you can compare the effects of market volatilities on Tesla and Automotive Properties 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 Automotive Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Automotive Properties.
Diversification Opportunities for Tesla and Automotive Properties
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and Automotive is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Automotive Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Properties 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 Automotive Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Properties has no effect on the direction of Tesla i.e., Tesla and Automotive Properties go up and down completely randomly.
Pair Corralation between Tesla and Automotive Properties
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 3.2 times more return on investment than Automotive Properties. However, Tesla is 3.2 times more volatile than Automotive Properties Real. It trades about 0.15 of its potential returns per unit of risk. Automotive Properties Real is currently generating about 0.01 per unit of risk. If you would invest 1,839 in Tesla Inc CDR on November 3, 2024 and sell it today you would earn a total of 1,835 from holding Tesla Inc CDR or generate 99.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc CDR vs. Automotive Properties Real
Performance |
| Timeline |
| Tesla Inc CDR |
| Automotive Properties |
Tesla and Automotive Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Automotive Properties
The main advantage of trading using opposite Tesla and Automotive Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Automotive Properties 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 Automotive Properties will offset losses from the drop in Automotive Properties' long position.| Tesla vs. Thunderbird Entertainment Group | Tesla vs. T2 Metals Corp | Tesla vs. Rocky Mountain Liquor | Tesla vs. Mako Mining Corp |
| Automotive Properties vs. Inovalis Real Estate | Automotive Properties vs. Dream Industrial Real | Automotive Properties vs. BTB Real Estate | Automotive Properties vs. True North Commercial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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