Correlation Between Tesla and SBI Holdings
Can any of the company-specific risk be diversified away by investing in both Tesla and SBI 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 SBI 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 SBI Holdings, you can compare the effects of market volatilities on Tesla and SBI 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 SBI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and SBI Holdings.
Diversification Opportunities for Tesla and SBI Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tesla and SBI is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and SBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Holdings 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 SBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Holdings has no effect on the direction of Tesla i.e., Tesla and SBI Holdings go up and down completely randomly.
Pair Corralation between Tesla and SBI Holdings
Given the investment horizon of 90 days Tesla Inc is expected to generate 1.59 times more return on investment than SBI Holdings. However, Tesla is 1.59 times more volatile than SBI Holdings. It trades about 0.26 of its potential returns per unit of risk. SBI Holdings is currently generating about 0.22 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 7,608 from holding Tesla Inc or generate 28.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. SBI Holdings
Performance |
| Timeline |
| Tesla Inc |
| SBI Holdings |
Tesla and SBI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and SBI Holdings
The main advantage of trading using opposite Tesla and SBI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, SBI 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 SBI Holdings will offset losses from the drop in SBI Holdings' long position.The idea behind Tesla Inc and SBI Holdings 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.| SBI Holdings vs. Blackstone Group | SBI Holdings vs. BlackRock | SBI Holdings vs. Apollo Global Management | SBI Holdings vs. Bank of New |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |