Correlation Between Tesla and FG Group

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

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

Diversification Opportunities for Tesla and FG Group

-0.33

Correlation Coefficient

Tesla  FG Group

Very good diversification

The 3 months correlation between Tesla and FGH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and FG Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Group Holdings 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 FG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Group Holdings has no effect on the direction of Tesla i.e., Tesla and FG Group go up and down completely randomly.

Pair Corralation between Tesla and FG Group

If you would invest  40,099  in Tesla Inc on October 11, 2024 and sell it today you would lose (605.00) from holding Tesla Inc or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Tesla Inc  vs.  FG Group Holdings

Tesla Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

FG Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, FG Group is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tesla and FG Group

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

The idea behind Tesla Inc and FG Group Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.