Correlation Between Tesla and CI Canadian
Can any of the company-specific risk be diversified away by investing in both Tesla and CI Canadian 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 CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and CI Canadian REIT, you can compare the effects of market volatilities on Tesla and CI Canadian 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 CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and CI Canadian.
Diversification Opportunities for Tesla and CI Canadian
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and RIT is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and CI Canadian REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian REIT 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 CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian REIT has no effect on the direction of Tesla i.e., Tesla and CI Canadian go up and down completely randomly.
Pair Corralation between Tesla and CI Canadian
Given the investment horizon of 90 days Tesla Inc is expected to generate 11.49 times more return on investment than CI Canadian. However, Tesla is 11.49 times more volatile than CI Canadian REIT. It trades about 0.35 of its potential returns per unit of risk. CI Canadian REIT is currently generating about -0.36 per unit of risk. If you would invest 21,365 in Tesla Inc on August 24, 2024 and sell it today you would earn a total of 12,599 from holding Tesla Inc or generate 58.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. CI Canadian REIT
Performance |
| Timeline |
| Tesla Inc |
| CI Canadian REIT |
Tesla and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and CI Canadian
The main advantage of trading using opposite Tesla and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, CI Canadian 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 CI Canadian will offset losses from the drop in CI Canadian's long position.The idea behind Tesla Inc and CI Canadian REIT 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.| CI Canadian vs. BMO Equal Weight | CI Canadian vs. Vanguard FTSE Canadian | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. BMO Equal Weight |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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