Correlation Between Tesla and FIBRA Prologis

Can any of the company-specific risk be diversified away by investing in both Tesla and FIBRA Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on Tesla and FIBRA Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and FIBRA Prologis.

Diversification Opportunities for Tesla and FIBRA Prologis

-0.65

Correlation Coefficient

Tesla  FIBRA Prologis

Excellent diversification

The 3 months correlation between Tesla and FIBRA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Prologis has no effect on the direction of Tesla i.e., Tesla and FIBRA Prologis go up and down completely randomly.

Pair Corralation between Tesla and FIBRA Prologis

Assuming the 90 days trading horizon Tesla Inc is expected to under-perform the FIBRA Prologis. In addition to that, Tesla is 1.94 times more volatile than FIBRA Prologis. It trades about -0.19 of its total potential returns per unit of risk. FIBRA Prologis is currently generating about 0.09 per unit of volatility. If you would invest  5,827  in FIBRA Prologis on December 23, 2024 and sell it today you would earn a total of  691.00  from holding FIBRA Prologis or generate 11.86% return on investment over 90 days.

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

Tesla Inc  vs.  FIBRA Prologis

Tesla Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tesla Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

FIBRA Prologis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Prologis are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, FIBRA Prologis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and FIBRA Prologis

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

The idea behind Tesla Inc and FIBRA Prologis 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.