Correlation Between FANDIFI TECHNOLOGY and Tesla

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

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

Diversification Opportunities for FANDIFI TECHNOLOGY and Tesla

0.0

Correlation Coefficient

FANDIFI TECHNOLOGY  Tesla

Pay attention - limited upside

The 3 months correlation between FANDIFI and Tesla is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANDIFI TECHNOLOGY P and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P 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 FANDIFI TECHNOLOGY i.e., FANDIFI TECHNOLOGY and Tesla go up and down completely randomly.

Pair Corralation between FANDIFI TECHNOLOGY and Tesla

If you would invest  22,000  in Tesla Inc on October 7, 2024 and sell it today you would earn a total of  17,900  from holding Tesla Inc or generate 81.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

FANDIFI TECHNOLOGY P  vs.  Tesla Inc

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the 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. Despite nearly fragile basic indicators, Tesla reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FANDIFI TECHNOLOGY and Tesla

The main advantage of trading using opposite FANDIFI TECHNOLOGY and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..