Correlation Between Tesla and Fisker

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

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

Diversification Opportunities for Tesla and Fisker

0.45

Correlation Coefficient

Tesla  Fisker

Very weak diversification

The 3 months correlation between Tesla and Fisker is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Fisker Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisker Inc 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 Fisker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisker Inc has no effect on the direction of Tesla i.e., Tesla and Fisker go up and down completely randomly.

Pair Corralation between Tesla and Fisker

If you would invest  21,411  in Tesla Inc on August 30, 2024 and sell it today you would earn a total of  11,878  from holding Tesla Inc or generate 55.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Tesla Inc  vs.  Fisker Inc

Tesla Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 13 (%) 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.

Fisker Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fisker Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fisker is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tesla and Fisker

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

The idea behind Tesla Inc and Fisker Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.