Correlation Between Tesla and Star Holdings
Can any of the company-specific risk be diversified away by investing in both Tesla and Star 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 Star 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 Star Holdings, you can compare the effects of market volatilities on Tesla and Star 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 Star Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Star Holdings.
Diversification Opportunities for Tesla and Star Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and Star is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Star Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star 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 Star Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Holdings has no effect on the direction of Tesla i.e., Tesla and Star Holdings go up and down completely randomly.
Pair Corralation between Tesla and Star Holdings
Given the investment horizon of 90 days Tesla Inc is expected to generate 3.17 times more return on investment than Star Holdings. However, Tesla is 3.17 times more volatile than Star Holdings. It trades about 0.19 of its potential returns per unit of risk. Star Holdings is currently generating about -0.17 per unit of risk. If you would invest 21,060 in Tesla Inc on September 3, 2024 and sell it today you would earn a total of 13,456 from holding Tesla Inc or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Star Holdings
Performance |
| Timeline |
| Tesla Inc |
| Star Holdings |
Tesla and Star Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Star Holdings
The main advantage of trading using opposite Tesla and Star Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Star 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 Star Holdings will offset losses from the drop in Star Holdings' long position.The idea behind Tesla Inc and Star 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.| Star Holdings vs. Integral Ad Science | Star Holdings vs. Stagwell | Star Holdings vs. Socket Mobile | Star Holdings vs. Tesla Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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