Correlation Between Tesla and Nokia

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

By analyzing existing cross correlation between Tesla Inc and Nokia 6625 percent, you can compare the effects of market volatilities on Tesla and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Nokia.

Diversification Opportunities for Tesla and Nokia

-0.67

Correlation Coefficient

Tesla  Nokia

Excellent diversification

The 3 months correlation between Tesla and Nokia is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Nokia 6625 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 6625 percent 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia 6625 percent has no effect on the direction of Tesla i.e., Tesla and Nokia go up and down completely randomly.

Pair Corralation between Tesla and Nokia

Given the investment horizon of 90 days Tesla Inc is expected to generate 4.53 times more return on investment than Nokia. However, Tesla is 4.53 times more volatile than Nokia 6625 percent. It trades about 0.16 of its potential returns per unit of risk. Nokia 6625 percent is currently generating about -0.16 per unit of risk. If you would invest  23,017  in Tesla Inc on September 5, 2024 and sell it today you would earn a total of  12,125  from holding Tesla Inc or generate 52.68% return on investment over 90 days.

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

Tesla Inc  vs.  Nokia 6625 percent

Tesla Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

Nokia 6625 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nokia 6625 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Nokia 6625 percent investors.

Pair Trading with Tesla and Nokia

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

The idea behind Tesla Inc and Nokia 6625 percent 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.