Correlation Between Tesla and LOWES
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By analyzing existing cross correlation between Tesla Inc and LOWES PANIES INC, you can compare the effects of market volatilities on Tesla and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and LOWES.
Diversification Opportunities for Tesla and LOWES
Excellent diversification
The 3 months correlation between Tesla and LOWES is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Tesla i.e., Tesla and LOWES go up and down completely randomly.
Pair Corralation between Tesla and LOWES
Given the investment horizon of 90 days Tesla Inc is expected to generate 9.87 times more return on investment than LOWES. However, Tesla is 9.87 times more volatile than LOWES PANIES INC. It trades about 0.21 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about -0.22 per unit of risk. If you would invest 35,000 in Tesla Inc on September 12, 2024 and sell it today you would earn a total of 5,099 from holding Tesla Inc or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tesla Inc vs. LOWES PANIES INC
Performance |
| Timeline |
| Tesla Inc |
| LOWES PANIES INC |
Tesla and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and LOWES
The main advantage of trading using opposite Tesla and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.The idea behind Tesla Inc and LOWES PANIES INC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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