Correlation Between Faraday Future and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Faraday Future and Niu Technologies 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 Niu Technologies 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 Niu Technologies, you can compare the effects of market volatilities on Faraday Future and Niu Technologies 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 Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Niu Technologies.
Diversification Opportunities for Faraday Future and Niu Technologies
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Faraday and Niu is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies 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 Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Faraday Future i.e., Faraday Future and Niu Technologies go up and down completely randomly.
Pair Corralation between Faraday Future and Niu Technologies
Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the Niu Technologies. In addition to that, Faraday Future is 1.38 times more volatile than Niu Technologies. It trades about -0.33 of its total potential returns per unit of risk. Niu Technologies is currently generating about -0.36 per unit of volatility. If you would invest 252.00 in Niu Technologies on August 27, 2024 and sell it today you would lose (67.00) from holding Niu Technologies or give up 26.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Future Intelligent vs. Niu Technologies
Performance |
| Timeline |
| Faraday Future Intel |
| Niu Technologies |
Faraday Future and Niu Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Future and Niu Technologies
The main advantage of trading using opposite Faraday Future and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Niu Technologies 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 Niu Technologies will offset losses from the drop in Niu Technologies' long position.| Faraday Future vs. Nio Class A | Faraday Future vs. Lucid Group | Faraday Future vs. Tesla Inc | Faraday Future vs. Mullen Automotive |
| Niu Technologies vs. Xpeng Inc | Niu Technologies vs. Nio Class A | Niu Technologies vs. Lucid Group | Niu Technologies vs. BYD Co Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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