Correlation Between Tesla and Three Sixty

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

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

Diversification Opportunities for Tesla and Three Sixty

-0.89

Correlation Coefficient

Tesla  Three Sixty

Pay attention - limited upside

The 3 months correlation between Tesla and Three is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Three Sixty Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Three Sixty Solar 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 Three Sixty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Three Sixty Solar has no effect on the direction of Tesla i.e., Tesla and Three Sixty go up and down completely randomly.

Pair Corralation between Tesla and Three Sixty

Given the investment horizon of 90 days Tesla Inc is expected to generate 0.19 times more return on investment than Three Sixty. However, Tesla Inc is 5.32 times less risky than Three Sixty. It trades about -0.01 of its potential returns per unit of risk. Three Sixty Solar is currently generating about -0.23 per unit of risk. If you would invest  43,617  in Tesla Inc on October 20, 2024 and sell it today you would lose (967.00) from holding Tesla Inc or give up 2.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Tesla Inc  vs.  Three Sixty Solar

Tesla Inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 18 (%) 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.

Three Sixty Solar

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Three Sixty Solar are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Three Sixty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and Three Sixty

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

The idea behind Tesla Inc and Three Sixty Solar 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.