Correlation Between Faraday Future and Momentus
Can any of the company-specific risk be diversified away by investing in both Faraday Future and Momentus 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 Momentus 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 Momentus, you can compare the effects of market volatilities on Faraday Future and Momentus 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 Momentus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Momentus.
Diversification Opportunities for Faraday Future and Momentus
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Faraday and Momentus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Momentus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentus 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 Momentus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentus has no effect on the direction of Faraday Future i.e., Faraday Future and Momentus go up and down completely randomly.
Pair Corralation between Faraday Future and Momentus
Assuming the 90 days horizon Faraday Future Intelligent is expected to under-perform the Momentus. In addition to that, Faraday Future is 1.3 times more volatile than Momentus. It trades about -0.06 of its total potential returns per unit of risk. Momentus is currently generating about 0.13 per unit of volatility. If you would invest 1.19 in Momentus on September 2, 2024 and sell it today you would earn a total of 0.21 from holding Momentus or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Future Intelligent vs. Momentus
Performance |
| Timeline |
| Faraday Future Intel |
| Momentus |
Faraday Future and Momentus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Future and Momentus
The main advantage of trading using opposite Faraday Future and Momentus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Momentus 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 Momentus will offset losses from the drop in Momentus' long position.| Faraday Future vs. HYZON Motors | Faraday Future vs. NextNav Warrant | Faraday Future vs. Inspira Technologies Oxy | Faraday Future vs. AppTech Payments Corp |
| Momentus vs. Heico | Momentus vs. Mercury Systems | Momentus vs. AeroVironment | Momentus vs. Howmet Aerospace |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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