Correlation Between 49327M3F9 and Tesla

Can any of the company-specific risk be diversified away by investing in both 49327M3F9 and Tesla 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 49327M3F9 and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KEY 585 15 NOV 27 and Tesla Inc, you can compare the effects of market volatilities on 49327M3F9 and Tesla 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 49327M3F9 with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49327M3F9 and Tesla.

Diversification Opportunities for 49327M3F9 and Tesla

-0.57

Correlation Coefficient

49327M3F9  Tesla

Excellent diversification

The 3 months correlation between 49327M3F9 and Tesla is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding KEY 585 15 NOV 27 and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and 49327M3F9 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 KEY 585 15 NOV 27 are associated (or correlated) with Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of 49327M3F9 i.e., 49327M3F9 and Tesla go up and down completely randomly.

Pair Corralation between 49327M3F9 and Tesla

Assuming the 90 days trading horizon KEY 585 15 NOV 27 is expected to under-perform the Tesla. But the bond apears to be less risky and, when comparing its historical volatility, KEY 585 15 NOV 27 is 1.38 times less risky than Tesla. The bond trades about -0.23 of its potential returns per unit of risk. The Tesla Inc is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  33,859  in Tesla Inc on September 25, 2024 and sell it today you would earn a total of  12,369  from holding Tesla Inc or generate 36.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

KEY 585 15 NOV 27  vs.  Tesla Inc

KEY 585 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 585 15 NOV 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49327M3F9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tesla Inc

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 16 (%) 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.

Pair Trading with 49327M3F9 and Tesla

The main advantage of trading using opposite 49327M3F9 and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49327M3F9 position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.

The idea behind KEY 585 15 NOV 27 and Tesla Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.