Correlation Between Tesla and Strix Group
Can any of the company-specific risk be diversified away by investing in both Tesla and Strix Group 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 Strix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Strix Group Plc, you can compare the effects of market volatilities on Tesla and Strix Group 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Strix Group.
Diversification Opportunities for Tesla and Strix Group
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tesla and Strix is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Tesla i.e., Tesla and Strix Group go up and down completely randomly.
Pair Corralation between Tesla and Strix Group
Given the investment horizon of 90 days Tesla Inc is expected to generate 1.72 times more return on investment than Strix Group. However, Tesla is 1.72 times more volatile than Strix Group Plc. It trades about 0.26 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.01 per unit of risk. If you would invest 26,251 in Tesla Inc on August 28, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Strix Group Plc
Performance |
| Timeline |
| Tesla Inc |
| Strix Group Plc |
Tesla and Strix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Strix Group
The main advantage of trading using opposite Tesla and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Strix Group 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 Strix Group will offset losses from the drop in Strix Group's long position.The idea behind Tesla Inc and Strix Group Plc 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.| Strix Group vs. Japan Tobacco | Strix Group vs. Transport International Holdings | Strix Group vs. Taiwan Semiconductor Manufacturing | Strix Group vs. UPDATE SOFTWARE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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