Correlation Between Tesla and Konica Minolta

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

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

Diversification Opportunities for Tesla and Konica Minolta

0.29

Correlation Coefficient

Tesla  Konica Minolta

Modest diversification

The 3 months correlation between Tesla and Konica is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Tesla i.e., Tesla and Konica Minolta go up and down completely randomly.

Pair Corralation between Tesla and Konica Minolta

Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Konica Minolta. In addition to that, Tesla is 12.43 times more volatile than Konica Minolta. It trades about -0.4 of its total potential returns per unit of risk. Konica Minolta is currently generating about -0.21 per unit of volatility. If you would invest  380.00  in Konica Minolta on December 5, 2024 and sell it today you would lose (5.00) from holding Konica Minolta or give up 1.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tesla Inc  vs.  Konica Minolta

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.

Konica Minolta

Risk-Adjusted Performance

Very Weak

Over the last 90 days Konica Minolta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Tesla and Konica Minolta

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

The idea behind Tesla Inc and Konica Minolta 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.