Correlation Between Tesla and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Tesla and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Tesla and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Canlan Ice.
Diversification Opportunities for Tesla and Canlan Ice
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tesla and Canlan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Tesla i.e., Tesla and Canlan Ice go up and down completely randomly.
Pair Corralation between Tesla and Canlan Ice
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 5.95 times more return on investment than Canlan Ice. However, Tesla is 5.95 times more volatile than Canlan Ice Sports. It trades about 0.26 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.25 per unit of risk. If you would invest 2,348 in Tesla Inc CDR on August 31, 2024 and sell it today you would earn a total of 692.00 from holding Tesla Inc CDR or generate 29.47% 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. Canlan Ice Sports
Performance |
| Timeline |
| Tesla Inc CDR |
| Canlan Ice Sports |
Tesla and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Canlan Ice
The main advantage of trading using opposite Tesla and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Tesla vs. Berkshire Hathaway CDR | Tesla vs. JPMorgan Chase Co | Tesla vs. Bank of America | Tesla vs. Alphabet Inc CDR |
| Canlan Ice vs. Berkshire Hathaway CDR | Canlan Ice vs. JPMorgan Chase Co | Canlan Ice vs. Bank of America | Canlan Ice vs. Alphabet Inc CDR |
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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |