Correlation Between Faraday Future and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Faraday Future and Hesai Group 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 Faraday Future and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Future Intelligent and Hesai Group American, you can compare the effects of market volatilities on Faraday Future and Hesai Group 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 Faraday Future with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Hesai Group.
Diversification Opportunities for Faraday Future and Hesai Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Faraday and Hesai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American and Faraday Future 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 Faraday Future Intelligent are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Faraday Future i.e., Faraday Future and Hesai Group go up and down completely randomly.
Pair Corralation between Faraday Future and Hesai Group
Given the investment horizon of 90 days Faraday Future is expected to generate 2.11 times less return on investment than Hesai Group. In addition to that, Faraday Future is 1.51 times more volatile than Hesai Group American. It trades about 0.09 of its total potential returns per unit of risk. Hesai Group American is currently generating about 0.28 per unit of volatility. If you would invest 423.00 in Hesai Group American on November 18, 2024 and sell it today you would earn a total of 1,341 from holding Hesai Group American or generate 317.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Future Intelligent vs. Hesai Group American
Performance |
| Timeline |
| Faraday Future Intel |
| Hesai Group American |
Faraday Future and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Future and Hesai Group
The main advantage of trading using opposite Faraday Future and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.The idea behind Faraday Future Intelligent and Hesai Group American 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.| Hesai Group vs. Li Auto | Hesai Group vs. Aptiv PLC | Hesai Group vs. EMCOR Group | Hesai Group vs. MYR Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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