Correlation Between Tesla and ANTA Sports
Can any of the company-specific risk be diversified away by investing in both Tesla and ANTA Sports 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 ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and ANTA Sports Products, you can compare the effects of market volatilities on Tesla and ANTA Sports 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 ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and ANTA Sports.
Diversification Opportunities for Tesla and ANTA Sports
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tesla and ANTA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Tesla i.e., Tesla and ANTA Sports go up and down completely randomly.
Pair Corralation between Tesla and ANTA Sports
Given the investment horizon of 90 days Tesla Inc is expected to generate 2.12 times more return on investment than ANTA Sports. However, Tesla is 2.12 times more volatile than ANTA Sports Products. It trades about 0.31 of its potential returns per unit of risk. ANTA Sports Products is currently generating about -0.02 per unit of risk. If you would invest 26,251 in Tesla Inc on August 27, 2024 and sell it today you would earn a total of 9,005 from holding Tesla Inc or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. ANTA Sports Products
Performance |
| Timeline |
| Tesla Inc |
| ANTA Sports Products |
Tesla and ANTA Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and ANTA Sports
The main advantage of trading using opposite Tesla and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, ANTA Sports 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 ANTA Sports will offset losses from the drop in ANTA Sports' long position.The idea behind Tesla Inc and ANTA Sports Products pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ANTA Sports vs. ANTA Sports Products | ANTA Sports vs. Li Ning Company | ANTA Sports vs. Li Ning Co | ANTA Sports vs. Anhui Conch Cement |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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