Correlation Between Tesla and Tinka Resources

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

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

Diversification Opportunities for Tesla and Tinka Resources

-0.79

Correlation Coefficient

Tesla  Tinka Resources

Pay attention - limited upside

The 3 months correlation between Tesla and Tinka is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka Resources 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 Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Tesla i.e., Tesla and Tinka Resources go up and down completely randomly.

Pair Corralation between Tesla and Tinka Resources

Given the investment horizon of 90 days Tesla Inc is expected to generate 0.57 times more return on investment than Tinka Resources. However, Tesla Inc is 1.74 times less risky than Tinka Resources. It trades about 0.06 of its potential returns per unit of risk. Tinka Resources Limited is currently generating about 0.01 per unit of risk. If you would invest  18,827  in Tesla Inc on October 24, 2024 and sell it today you would earn a total of  23,477  from holding Tesla Inc or generate 124.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Tesla Inc  vs.  Tinka Resources Limited

Tesla Inc

Risk-Adjusted Performance

15 of 100

Solid

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.

Tinka Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tinka Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental 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 Tinka Resources

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

The idea behind Tesla Inc and Tinka Resources Limited 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.