Correlation Between Tesla and Siantar Top
Can any of the company-specific risk be diversified away by investing in both Tesla and Siantar Top 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 Siantar Top into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Siantar Top Tbk, you can compare the effects of market volatilities on Tesla and Siantar Top 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 Siantar Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Siantar Top.
Diversification Opportunities for Tesla and Siantar Top
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tesla and Siantar is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Siantar Top Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siantar Top Tbk 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 Siantar Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siantar Top Tbk has no effect on the direction of Tesla i.e., Tesla and Siantar Top go up and down completely randomly.
Pair Corralation between Tesla and Siantar Top
Given the investment horizon of 90 days Tesla is expected to generate 1.09 times less return on investment than Siantar Top. In addition to that, Tesla is 1.09 times more volatile than Siantar Top Tbk. It trades about 0.05 of its total potential returns per unit of risk. Siantar Top Tbk is currently generating about 0.06 per unit of volatility. If you would invest 720,000 in Siantar Top Tbk on August 27, 2024 and sell it today you would earn a total of 700,000 from holding Siantar Top Tbk or generate 97.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.51% |
| Values | Daily Returns |
Tesla Inc vs. Siantar Top Tbk
Performance |
| Timeline |
| Tesla Inc |
| Siantar Top Tbk |
Tesla and Siantar Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Siantar Top
The main advantage of trading using opposite Tesla and Siantar Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Siantar Top 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 Siantar Top will offset losses from the drop in Siantar Top's long position.The idea behind Tesla Inc and Siantar Top Tbk 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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