Correlation Between Tesla and SVB Financial
Can any of the company-specific risk be diversified away by investing in both Tesla and SVB Financial 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 SVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and SVB Financial Group, you can compare the effects of market volatilities on Tesla and SVB Financial 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 SVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and SVB Financial.
Diversification Opportunities for Tesla and SVB Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and SVB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and SVB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB Financial Group 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 SVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB Financial Group has no effect on the direction of Tesla i.e., Tesla and SVB Financial go up and down completely randomly.
Pair Corralation between Tesla and SVB Financial
Assuming the 90 days trading horizon Tesla Inc is expected to generate 1.24 times more return on investment than SVB Financial. However, Tesla is 1.24 times more volatile than SVB Financial Group. It trades about 0.07 of its potential returns per unit of risk. SVB Financial Group is currently generating about -0.05 per unit of risk. If you would invest 2,653 in Tesla Inc on September 3, 2024 and sell it today you would earn a total of 3,847 from holding Tesla Inc or generate 145.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Tesla Inc vs. SVB Financial Group
Performance |
| Timeline |
| Tesla Inc |
| SVB Financial Group |
Tesla and SVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and SVB Financial
The main advantage of trading using opposite Tesla and SVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, SVB Financial 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 SVB Financial will offset losses from the drop in SVB Financial's long position.The idea behind Tesla Inc and SVB Financial Group 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.| SVB Financial vs. Ita Unibanco Holding | SVB Financial vs. Ita Unibanco Holding | SVB Financial vs. Deutsche Bank Aktiengesellschaft | SVB Financial vs. Banco Bradesco SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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