Correlation Between Tesla and Celestica
Can any of the company-specific risk be diversified away by investing in both Tesla and Celestica 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 Celestica 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 Celestica, you can compare the effects of market volatilities on Tesla and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Celestica.
Diversification Opportunities for Tesla and Celestica
Poor diversification
The 3 months correlation between Tesla and Celestica is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Tesla i.e., Tesla and Celestica go up and down completely randomly.
Pair Corralation between Tesla and Celestica
Assuming the 90 days trading horizon Tesla is expected to generate 2.5 times less return on investment than Celestica. In addition to that, Tesla is 1.07 times more volatile than Celestica. It trades about 0.06 of its total potential returns per unit of risk. Celestica is currently generating about 0.15 per unit of volatility. If you would invest 1,817 in Celestica on November 2, 2024 and sell it today you would earn a total of 14,761 from holding Celestica or generate 812.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc CDR vs. Celestica
Performance |
| Timeline |
| Tesla Inc CDR |
| Celestica |
Tesla and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Celestica
The main advantage of trading using opposite Tesla and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.| Tesla vs. Thunderbird Entertainment Group | Tesla vs. T2 Metals Corp | Tesla vs. Rocky Mountain Liquor | Tesla vs. Mako Mining Corp |
| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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