Correlation Between SPDR Series and Tesla
Can any of the company-specific risk be diversified away by investing in both SPDR Series and Tesla 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 SPDR Series and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and Tesla Inc, you can compare the effects of market volatilities on SPDR Series and Tesla 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 SPDR Series with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and Tesla.
Diversification Opportunities for SPDR Series and Tesla
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Tesla is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and SPDR Series 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 SPDR Series Trust are associated (or correlated) with Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of SPDR Series i.e., SPDR Series and Tesla go up and down completely randomly.
Pair Corralation between SPDR Series and Tesla
Assuming the 90 days trading horizon SPDR Series is expected to generate 5.76 times less return on investment than Tesla. But when comparing it to its historical volatility, SPDR Series Trust is 2.5 times less risky than Tesla. It trades about 0.03 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 307,903 in Tesla Inc on September 4, 2024 and sell it today you would earn a total of 421,085 from holding Tesla Inc or generate 136.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Series Trust vs. Tesla Inc
Performance |
| Timeline |
| SPDR Series Trust |
| Tesla Inc |
SPDR Series and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and Tesla
The main advantage of trading using opposite SPDR Series and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.| SPDR Series vs. SPDR Dow Jones | SPDR Series vs. SPDR Gold Trust | SPDR Series vs. SPDR SP 500 | SPDR Series vs. SPDR SP Regional |
| Tesla vs. Grupo Sports World | Tesla vs. CVS Health | Tesla vs. Lloyds Banking Group | Tesla vs. Prudential Financial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |