Correlation Between Tesla and ChampionX

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

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

Diversification Opportunities for Tesla and ChampionX

0.0

Correlation Coefficient

Tesla  ChampionX

Pay attention - limited upside

The 3 months correlation between Tesla and ChampionX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Tesla i.e., Tesla and ChampionX go up and down completely randomly.

Pair Corralation between Tesla and ChampionX

If you would invest  17,865  in Tesla Inc on March 7, 2024 and sell it today you would lose (388.00) from holding Tesla Inc or give up 2.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tesla Inc  vs.  ChampionX

Tesla Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tesla Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Tesla is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ChampionX is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tesla and ChampionX

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

The idea behind Tesla Inc and ChampionX 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.

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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.