Correlation Between Tesla and MNB Holdings
Can any of the company-specific risk be diversified away by investing in both Tesla and MNB Holdings 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 MNB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and MNB Holdings Corp, you can compare the effects of market volatilities on Tesla and MNB Holdings 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 MNB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and MNB Holdings.
Diversification Opportunities for Tesla and MNB Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tesla and MNB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and MNB Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNB Holdings Corp 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 MNB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNB Holdings Corp has no effect on the direction of Tesla i.e., Tesla and MNB Holdings go up and down completely randomly.
Pair Corralation between Tesla and MNB Holdings
Given the investment horizon of 90 days Tesla Inc is expected to generate 9.4 times more return on investment than MNB Holdings. However, Tesla is 9.4 times more volatile than MNB Holdings Corp. It trades about 0.04 of its potential returns per unit of risk. MNB Holdings Corp is currently generating about -0.23 per unit of risk. If you would invest 42,106 in Tesla Inc on October 21, 2024 and sell it today you would earn a total of 544.00 from holding Tesla Inc or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. MNB Holdings Corp
Performance |
| Timeline |
| Tesla Inc |
| MNB Holdings Corp |
Tesla and MNB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and MNB Holdings
The main advantage of trading using opposite Tesla and MNB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, MNB Holdings 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 MNB Holdings will offset losses from the drop in MNB Holdings' long position.| Tesla vs. Canoo Inc | Tesla vs. Aquagold International | Tesla vs. Morningstar Unconstrained Allocation | Tesla vs. Via Renewables |
| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. MF Bancorp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |