Correlation Between Tesla and Pro Real

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

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

Diversification Opportunities for Tesla and Pro Real

0.52

Correlation Coefficient

Tesla  Pro Real

Very weak diversification

The 3 months correlation between Tesla and Pro is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Pro Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Real Estate 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 CDR are associated (or correlated) with Pro Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Real Estate has no effect on the direction of Tesla i.e., Tesla and Pro Real go up and down completely randomly.

Pair Corralation between Tesla and Pro Real

Assuming the 90 days trading horizon Tesla Inc CDR is expected to under-perform the Pro Real. In addition to that, Tesla is 3.89 times more volatile than Pro Real Estate. It trades about -0.18 of its total potential returns per unit of risk. Pro Real Estate is currently generating about -0.04 per unit of volatility. If you would invest  523.00  in Pro Real Estate on December 22, 2024 and sell it today you would lose (18.00) from holding Pro Real Estate or give up 3.44% of portfolio value over 90 days.

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

Tesla Inc CDR  vs.  Pro Real Estate

Tesla Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tesla Inc CDR 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pro Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pro Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Pro Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tesla and Pro Real

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

The idea behind Tesla Inc CDR and Pro Real Estate 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..