Correlation Between Tesla and FIBRA Macquarie

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

By analyzing existing cross correlation between Tesla Inc and FIBRA Macquarie Mxico, you can compare the effects of market volatilities on Tesla and FIBRA Macquarie 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 FIBRA Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and FIBRA Macquarie.

Diversification Opportunities for Tesla and FIBRA Macquarie

-0.39

Correlation Coefficient

Tesla  FIBRA Macquarie

Very good diversification

The 3 months correlation between Tesla and FIBRA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and FIBRA Macquarie Mxico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Macquarie Mxico 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 FIBRA Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Macquarie Mxico has no effect on the direction of Tesla i.e., Tesla and FIBRA Macquarie go up and down completely randomly.

Pair Corralation between Tesla and FIBRA Macquarie

Assuming the 90 days trading horizon Tesla Inc is expected to generate 2.76 times more return on investment than FIBRA Macquarie. However, Tesla is 2.76 times more volatile than FIBRA Macquarie Mxico. It trades about 0.04 of its potential returns per unit of risk. FIBRA Macquarie Mxico is currently generating about -0.12 per unit of risk. If you would invest  786,942  in Tesla Inc on October 10, 2024 and sell it today you would earn a total of  10,026  from holding Tesla Inc or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tesla Inc  vs.  FIBRA Macquarie Mxico

Tesla Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Tesla showed solid returns over the last few months and may actually be approaching a breakup point.

FIBRA Macquarie Mxico

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIBRA Macquarie Mxico has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, FIBRA Macquarie is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tesla and FIBRA Macquarie

The main advantage of trading using opposite Tesla and FIBRA Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, FIBRA Macquarie 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 FIBRA Macquarie will offset losses from the drop in FIBRA Macquarie's long position.

The idea behind Tesla Inc and FIBRA Macquarie Mxico 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.