Correlation Between Tesla and Silver One

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

Diversification Opportunities for Tesla and Silver One

-0.67

Correlation Coefficient

Tesla  Silver One

Excellent diversification

The 3 months correlation between Tesla and Silver is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Silver One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver One Resources 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 Silver One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver One Resources has no effect on the direction of Tesla i.e., Tesla and Silver One go up and down completely randomly.

Pair Corralation between Tesla and Silver One

Assuming the 90 days trading horizon Tesla Inc CDR is expected to under-perform the Silver One. But the stock apears to be less risky and, when comparing its historical volatility, Tesla Inc CDR is 1.33 times less risky than Silver One. The stock trades about -0.14 of its potential returns per unit of risk. The Silver One Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Silver One Resources on December 27, 2024 and sell it today you would earn a total of  7.00  from holding Silver One Resources or generate 41.18% return on investment over 90 days.

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

Tesla Inc CDR  vs.  Silver One Resources

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 abnormal 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.

Silver One Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silver One Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Silver One showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and Silver One

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

The idea behind Tesla Inc CDR and Silver One Resources 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.