Correlation Between Tesla and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both Tesla and Bald Eagle 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 Bald Eagle 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 Bald Eagle Gold, you can compare the effects of market volatilities on Tesla and Bald Eagle 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 Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Bald Eagle.
Diversification Opportunities for Tesla and Bald Eagle
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tesla and Bald is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle 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 Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of Tesla i.e., Tesla and Bald Eagle go up and down completely randomly.
Pair Corralation between Tesla and Bald Eagle
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 0.84 times more return on investment than Bald Eagle. However, Tesla Inc CDR is 1.2 times less risky than Bald Eagle. It trades about 0.15 of its potential returns per unit of risk. Bald Eagle Gold is currently generating about -0.03 per unit of risk. If you would invest 1,615 in Tesla Inc CDR on August 25, 2024 and sell it today you would earn a total of 1,599 from holding Tesla Inc CDR or generate 99.01% 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. Bald Eagle Gold
Performance |
| Timeline |
| Tesla Inc CDR |
| Bald Eagle Gold |
Tesla and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Bald Eagle
The main advantage of trading using opposite Tesla and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| Tesla vs. Falcon Energy Materials | Tesla vs. Leons Furniture Limited | Tesla vs. Ocumetics Technology Corp | Tesla vs. Champion Iron |
| Bald Eagle vs. Mako Mining Corp | Bald Eagle vs. Arizona Gold Silver | Bald Eagle vs. Globex Mining Enterprises | Bald Eagle vs. T2 Metals 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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