Correlation Between Tesla and Taseko Mines

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

Diversification Opportunities for Tesla and Taseko Mines

-0.76

Correlation Coefficient

Tesla  Taseko Mines

Pay attention - limited upside

The 3 months correlation between Tesla and Taseko is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines 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 Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of Tesla i.e., Tesla and Taseko Mines go up and down completely randomly.

Pair Corralation between Tesla and Taseko Mines

Assuming the 90 days trading horizon Tesla is expected to generate 1.11 times less return on investment than Taseko Mines. In addition to that, Tesla is 1.13 times more volatile than Taseko Mines. It trades about 0.05 of its total potential returns per unit of risk. Taseko Mines is currently generating about 0.07 per unit of volatility. If you would invest  166.00  in Taseko Mines on October 5, 2024 and sell it today you would earn a total of  120.00  from holding Taseko Mines or generate 72.29% 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.  Taseko Mines

Tesla Inc CDR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc CDR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Tesla exhibited solid returns over the last few months and may actually be approaching a breakup point.

Taseko Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taseko Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Tesla and Taseko Mines

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

The idea behind Tesla Inc CDR and Taseko Mines 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.