Correlation Between United Internet and Tesla

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

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

Diversification Opportunities for United Internet and Tesla

0.59

Correlation Coefficient

United Internet  Tesla

Very weak diversification

The 3 months correlation between United and Tesla is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc and United Internet 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 United Internet AG 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 United Internet i.e., United Internet and Tesla go up and down completely randomly.

Pair Corralation between United Internet and Tesla

Assuming the 90 days trading horizon United Internet AG is expected to generate 0.64 times more return on investment than Tesla. However, United Internet AG is 1.56 times less risky than Tesla. It trades about 0.21 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.11 per unit of risk. If you would invest  1,810  in United Internet AG on April 23, 2025 and sell it today you would earn a total of  660.00  from holding United Internet AG or generate 36.46% return on investment over 90 days.

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

United Internet AG  vs.  Tesla Inc

United Internet AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Internet AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, United Internet reported solid returns over the last few months and may actually be approaching a breakup point.

Tesla Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tesla reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Internet and Tesla

The main advantage of trading using opposite United Internet and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet 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 United Internet AG 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.