Correlation Between Kandi Technologies and Tesla

Can any of the company-specific risk be diversified away by investing in both Kandi Technologies 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 Kandi Technologies and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kandi Technologies Group and Tesla Inc, you can compare the effects of market volatilities on Kandi Technologies 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 Kandi Technologies with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Tesla.

Diversification Opportunities for Kandi Technologies and Tesla

-0.75

Correlation Coefficient

Kandi Technologies  Tesla

Pay attention - limited upside

The 3 months correlation between Kandi and Tesla is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Tesla go up and down completely randomly.

Pair Corralation between Kandi Technologies and Tesla

Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Tesla. In addition to that, Kandi Technologies is 1.02 times more volatile than Tesla Inc. It trades about -0.09 of its total potential returns per unit of risk. Tesla Inc is currently generating about 0.19 per unit of volatility. If you would invest  21,060  in Tesla Inc on September 1, 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	Weak
Accuracy	100.0%
Values	Daily Returns

Kandi Technologies Group  vs.  Tesla Inc

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Tesla Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kandi Technologies and Tesla

The main advantage of trading using opposite Kandi Technologies and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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.

The idea behind Kandi Technologies Group and Tesla 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.