Correlation Between Electric Car and Faraday Future
Can any of the company-specific risk be diversified away by investing in both Electric Car and Faraday Future 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 Electric Car and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electric Car and Faraday Future Intelligent, you can compare the effects of market volatilities on Electric Car and Faraday Future 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 Electric Car with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electric Car and Faraday Future.
Diversification Opportunities for Electric Car and Faraday Future
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electric and Faraday is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electric Car and Faraday Future Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Future Intel and Electric Car 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 Electric Car are associated (or correlated) with Faraday Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Future Intel has no effect on the direction of Electric Car i.e., Electric Car and Faraday Future go up and down completely randomly.
Pair Corralation between Electric Car and Faraday Future
Given the investment horizon of 90 days Electric Car is expected to generate 8.87 times more return on investment than Faraday Future. However, Electric Car is 8.87 times more volatile than Faraday Future Intelligent. It trades about 0.22 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about 0.16 per unit of risk. If you would invest 0.01 in Electric Car on October 20, 2024 and sell it today you would earn a total of 1,685 from holding Electric Car or generate 1.68499E7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electric Car vs. Faraday Future Intelligent
Performance |
| Timeline |
| Electric Car |
| Faraday Future Intel |
Electric Car and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electric Car and Faraday Future
The main advantage of trading using opposite Electric Car and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electric Car position performs unexpectedly, Faraday Future 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 Faraday Future will offset losses from the drop in Faraday Future's long position.| Electric Car vs. Faraday Future Intelligent | Electric Car vs. Canoo Inc | Electric Car vs. Mullen Automotive | Electric Car vs. Hyzon Motors |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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