Correlation Between First Republic and Tesla
Can any of the company-specific risk be diversified away by investing in both First Republic 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 First Republic and Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Republic Bank and Tesla Inc, you can compare the effects of market volatilities on First Republic 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 First Republic with a short position of Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Tesla.
Diversification Opportunities for First Republic and Tesla
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Tesla is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and First Republic 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 First Republic Bank 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 First Republic i.e., First Republic and Tesla go up and down completely randomly.
Pair Corralation between First Republic and Tesla
If you would invest 439,507 in Tesla Inc on September 18, 2024 and sell it today you would earn a total of 490,174 from holding Tesla Inc or generate 111.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Republic Bank vs. Tesla Inc
Performance |
Timeline |
First Republic Bank |
Tesla Inc |
First Republic and Tesla Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Republic and Tesla
The main advantage of trading using opposite First Republic and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic 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.First Republic vs. Grupo Financiero Banorte | First Republic vs. Grupo Financiero Inbursa | First Republic vs. Banco del Bajo | First Republic vs. Fibra Mty SAPI |
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Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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