Correlation Between China Xuefeng and Faraday Future
Can any of the company-specific risk be diversified away by investing in both China Xuefeng 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 China Xuefeng and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Xuefeng Environmental and Faraday Future Intelligent, you can compare the effects of market volatilities on China Xuefeng 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 China Xuefeng with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Xuefeng and Faraday Future.
Diversification Opportunities for China Xuefeng and Faraday Future
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Faraday is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding China Xuefeng Environmental 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 China Xuefeng 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 China Xuefeng Environmental 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 China Xuefeng i.e., China Xuefeng and Faraday Future go up and down completely randomly.
Pair Corralation between China Xuefeng and Faraday Future
Given the investment horizon of 90 days China Xuefeng Environmental is expected to generate 1.62 times more return on investment than Faraday Future. However, China Xuefeng is 1.62 times more volatile than Faraday Future Intelligent. It trades about 0.1 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about 0.05 per unit of risk. If you would invest 5.00 in China Xuefeng Environmental on August 28, 2024 and sell it today you would lose (3.00) from holding China Xuefeng Environmental or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Xuefeng Environmental vs. Faraday Future Intelligent
Performance |
| Timeline |
| China Xuefeng Enviro |
| Faraday Future Intel |
China Xuefeng and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Xuefeng and Faraday Future
The main advantage of trading using opposite China Xuefeng and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Xuefeng 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.| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Renault SA | China Xuefeng vs. Toyota Motor Corp | China Xuefeng vs. Porsche Automobile Holding |
| Faraday Future vs. HYZON Motors | Faraday Future vs. NextNav Warrant | Faraday Future vs. Inspira Technologies Oxy | Faraday Future vs. AppTech Payments Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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