Correlation Between Tesla and Tytan Holdings

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

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

Diversification Opportunities for Tesla and Tytan Holdings

-0.69

Correlation Coefficient

Tesla  Tytan Holdings

Excellent diversification

The 3 months correlation between Tesla and Tytan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Tytan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tytan 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 Tytan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tytan Holdings has no effect on the direction of Tesla i.e., Tesla and Tytan Holdings go up and down completely randomly.

Pair Corralation between Tesla and Tytan Holdings

Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Tytan Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Tesla Inc is 2.98 times less risky than Tytan Holdings. The stock trades about -0.24 of its potential returns per unit of risk. The Tytan Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Tytan Holdings on December 19, 2024 and sell it today you would earn a total of  0.02  from holding Tytan Holdings or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Tesla Inc  vs.  Tytan Holdings

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.

Tytan Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tytan Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tytan Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and Tytan Holdings

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

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