Correlation Between Tesla and Copper

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

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

Diversification Opportunities for Tesla and Copper

-0.87

Correlation Coefficient

Tesla  Copper

Pay attention - limited upside

The 3 months correlation between Tesla and Copper is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 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 Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper has no effect on the direction of Tesla i.e., Tesla and Copper go up and down completely randomly.

Pair Corralation between Tesla and Copper

Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Copper. In addition to that, Tesla is 3.09 times more volatile than Copper. It trades about -0.13 of its total potential returns per unit of risk. Copper is currently generating about 0.25 per unit of volatility. If you would invest  409.00  in Copper on December 28, 2024 and sell it today you would earn a total of  103.00  from holding Copper or generate 25.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Tesla Inc  vs.  Copper

Tesla Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tesla Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Copper

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Copper are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Copper exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and Copper

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

The idea behind Tesla Inc and Copper 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.