Correlation Between SERI INDUSTRIAL and Tesla

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

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

Diversification Opportunities for SERI INDUSTRIAL and Tesla

-0.47

Correlation Coefficient

SERI INDUSTRIAL  Tesla

Very good diversification

The 3 months correlation between SERI and Tesla is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Tesla go up and down completely randomly.

Pair Corralation between SERI INDUSTRIAL and Tesla

Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to generate 1.04 times more return on investment than Tesla. However, SERI INDUSTRIAL is 1.04 times more volatile than Tesla Inc. It trades about 0.05 of its potential returns per unit of risk. Tesla Inc is currently generating about -0.08 per unit of risk. If you would invest  234.00  in SERI INDUSTRIAL EO on October 25, 2024 and sell it today you would earn a total of  5.00  from holding SERI INDUSTRIAL EO or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

SERI INDUSTRIAL EO  vs.  Tesla Inc

SERI INDUSTRIAL EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SERI INDUSTRIAL EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Tesla Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Tesla unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SERI INDUSTRIAL and Tesla

The main advantage of trading using opposite SERI INDUSTRIAL and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.