Correlation Between Tesla and Optiva

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

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

Diversification Opportunities for Tesla and Optiva

-0.26

Correlation Coefficient

Tesla  Optiva

Very good diversification

The 3 months correlation between Tesla and Optiva is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Optiva Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optiva Inc 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 CDR are associated (or correlated) with Optiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optiva Inc has no effect on the direction of Tesla i.e., Tesla and Optiva go up and down completely randomly.

Pair Corralation between Tesla and Optiva

Assuming the 90 days trading horizon Tesla is expected to generate 1.7 times less return on investment than Optiva. But when comparing it to its historical volatility, Tesla Inc CDR is 5.72 times less risky than Optiva. It trades about 0.13 of its potential returns per unit of risk. Optiva Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  146.00  in Optiva Inc on April 24, 2025 and sell it today you would lose (47.00) from holding Optiva Inc or give up 32.19% of portfolio value over 90 days.

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

Tesla Inc CDR  vs.  Optiva Inc

Tesla Inc CDR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc CDR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Tesla exhibited solid returns over the last few months and may actually be approaching a breakup point.

Optiva Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Optiva Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Optiva displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tesla and Optiva

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

The idea behind Tesla Inc CDR and Optiva 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.