Correlation Between Tesla and Westport Fuel
Can any of the company-specific risk be diversified away by investing in both Tesla and Westport Fuel 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 Westport Fuel 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 Westport Fuel Systems, you can compare the effects of market volatilities on Tesla and Westport Fuel 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 Westport Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Westport Fuel.
Diversification Opportunities for Tesla and Westport Fuel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and Westport is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Westport Fuel Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westport Fuel Systems 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 Westport Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westport Fuel Systems has no effect on the direction of Tesla i.e., Tesla and Westport Fuel go up and down completely randomly.
Pair Corralation between Tesla and Westport Fuel
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 1.2 times more return on investment than Westport Fuel. However, Tesla is 1.2 times more volatile than Westport Fuel Systems. It trades about 0.07 of its potential returns per unit of risk. Westport Fuel Systems is currently generating about -0.03 per unit of risk. If you would invest 2,163 in Tesla Inc CDR on October 6, 2024 and sell it today you would earn a total of 1,574 from holding Tesla Inc CDR or generate 72.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tesla Inc CDR vs. Westport Fuel Systems
Performance |
Timeline |
Tesla Inc CDR |
Westport Fuel Systems |
Tesla and Westport Fuel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tesla and Westport Fuel
The main advantage of trading using opposite Tesla and Westport Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Westport Fuel 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 Westport Fuel will offset losses from the drop in Westport Fuel's long position.Tesla vs. Dream Office Real | Tesla vs. Gfl Environmental Holdings | Tesla vs. MAG Silver Corp | Tesla vs. Champion Iron |
Westport Fuel vs. Ballard Power Systems | Westport Fuel vs. NFI Group | Westport Fuel vs. GreenPower Motor | Westport Fuel vs. Real Matters |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
CEOs Directory Screen CEOs from public companies around the world |