Correlation Between Tesla and Menora Mivtachim

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

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

Diversification Opportunities for Tesla and Menora Mivtachim

0.82

Correlation Coefficient

Tesla  Menora Mivtachim

Very poor diversification

The 3 months correlation between Tesla and Menora is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Menora Mivtachim Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Mivtachim 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 Menora Mivtachim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Mivtachim Holdings has no effect on the direction of Tesla i.e., Tesla and Menora Mivtachim go up and down completely randomly.

Pair Corralation between Tesla and Menora Mivtachim

Given the investment horizon of 90 days Tesla Inc is expected to generate 5.11 times more return on investment than Menora Mivtachim. However, Tesla is 5.11 times more volatile than Menora Mivtachim Holdings. It trades about 0.2 of its potential returns per unit of risk. Menora Mivtachim Holdings is currently generating about 0.13 per unit of risk. If you would invest  24,105  in Tesla Inc on October 9, 2024 and sell it today you would earn a total of  17,000  from holding Tesla Inc or generate 70.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.31%
Values	Daily Returns

Tesla Inc  vs.  Menora Mivtachim Holdings

Tesla Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 15 (%) 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.

Menora Mivtachim Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Menora Mivtachim Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Menora Mivtachim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Tesla and Menora Mivtachim

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

The idea behind Tesla Inc and Menora Mivtachim 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.