Correlation Between Ita Unibanco and Tesla

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

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

Diversification Opportunities for Ita Unibanco and Tesla

0.71

Correlation Coefficient

Ita Unibanco  Tesla

Poor diversification

The 3 months correlation between Ita and Tesla is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ita Unibanco Holding and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and Ita Unibanco 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 Ita Unibanco Holding 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 Ita Unibanco i.e., Ita Unibanco and Tesla go up and down completely randomly.

Pair Corralation between Ita Unibanco and Tesla

Assuming the 90 days trading horizon Ita Unibanco is expected to generate 4.52 times less return on investment than Tesla. But when comparing it to its historical volatility, Ita Unibanco Holding is 2.64 times less risky than Tesla. It trades about 0.05 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,040  in Tesla Inc on April 25, 2025 and sell it today you would earn a total of  716.00  from holding Tesla Inc or generate 14.21% return on investment over 90 days.

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

Ita Unibanco Holding  vs.  Tesla Inc

Ita Unibanco Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ita Unibanco Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ita Unibanco is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Tesla Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ita Unibanco and Tesla

The main advantage of trading using opposite Ita Unibanco and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ita Unibanco 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 Ita Unibanco Holding 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.