Correlation Between Tesla and Auckland International
Can any of the company-specific risk be diversified away by investing in both Tesla and Auckland International 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 Auckland International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Auckland International Airport, you can compare the effects of market volatilities on Tesla and Auckland International 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 Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Auckland International.
Diversification Opportunities for Tesla and Auckland International
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and Auckland is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International 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 Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of Tesla i.e., Tesla and Auckland International go up and down completely randomly.
Pair Corralation between Tesla and Auckland International
Given the investment horizon of 90 days Tesla Inc is expected to generate 1.8 times more return on investment than Auckland International. However, Tesla is 1.8 times more volatile than Auckland International Airport. It trades about 0.26 of its potential returns per unit of risk. Auckland International Airport is currently generating about -0.03 per unit of risk. If you would invest 26,251 in Tesla Inc on August 29, 2024 and sell it today you would earn a total of 7,572 from holding Tesla Inc or generate 28.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Auckland International Airport
Performance |
| Timeline |
| Tesla Inc |
| Auckland International |
Tesla and Auckland International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Auckland International
The main advantage of trading using opposite Tesla and Auckland International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Auckland International 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 Auckland International will offset losses from the drop in Auckland International's long position.The idea behind Tesla Inc and Auckland International Airport 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.| Auckland International vs. Aeroports de Paris | Auckland International vs. Aena SME SA | Auckland International vs. Aena SME SA | Auckland International vs. Airports of Thailand |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |