Correlation Between Faraday Future and HYZON Motors
Can any of the company-specific risk be diversified away by investing in both Faraday Future and HYZON Motors 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 HYZON Motors 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 HYZON Motors, you can compare the effects of market volatilities on Faraday Future and HYZON Motors 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 HYZON Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and HYZON Motors.
Diversification Opportunities for Faraday Future and HYZON Motors
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Faraday and HYZON is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and HYZON Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYZON Motors 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 HYZON Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYZON Motors has no effect on the direction of Faraday Future i.e., Faraday Future and HYZON Motors go up and down completely randomly.
Pair Corralation between Faraday Future and HYZON Motors
Assuming the 90 days horizon Faraday Future is expected to generate 2.44 times less return on investment than HYZON Motors. But when comparing it to its historical volatility, Faraday Future Intelligent is 3.3 times less risky than HYZON Motors. It trades about 0.17 of its potential returns per unit of risk. HYZON Motors is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.32 in HYZON Motors on November 29, 2024 and sell it today you would lose (0.02) from holding HYZON Motors or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 18.18% |
| Values | Daily Returns |
Faraday Future Intelligent vs. HYZON Motors
Performance |
| Timeline |
| Faraday Future Intel |
| HYZON Motors |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Faraday Future and HYZON Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Future and HYZON Motors
The main advantage of trading using opposite Faraday Future and HYZON Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, HYZON Motors 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 HYZON Motors will offset losses from the drop in HYZON Motors' long position.| Faraday Future vs. NextNav Warrant | Faraday Future vs. Inspira Technologies Oxy | Faraday Future vs. AppTech Payments Corp |
| HYZON Motors vs. Faraday Future Intelligent | HYZON Motors vs. NextNav Warrant | HYZON Motors vs. Inspira Technologies Oxy |
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 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.
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