Correlation Between Faraday Future and Microvast Holdings
Can any of the company-specific risk be diversified away by investing in both Faraday Future and Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings, you can compare the effects of market volatilities on Faraday Future and Microvast Holdings 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 Microvast Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Microvast Holdings.
Diversification Opportunities for Faraday Future and Microvast Holdings
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Faraday and Microvast is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings 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 Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Faraday Future i.e., Faraday Future and Microvast Holdings go up and down completely randomly.
Pair Corralation between Faraday Future and Microvast Holdings
Assuming the 90 days horizon Faraday Future Intelligent is expected to generate 1.1 times more return on investment than Microvast Holdings. However, Faraday Future is 1.1 times more volatile than Microvast Holdings. It trades about 0.06 of its potential returns per unit of risk. Microvast Holdings is currently generating about 0.04 per unit of risk. If you would invest 5.40 in Faraday Future Intelligent on August 27, 2024 and sell it today you would lose (3.43) from holding Faraday Future Intelligent or give up 63.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Faraday Future Intelligent vs. Microvast Holdings
Performance |
| Timeline |
| Faraday Future Intel |
| Microvast Holdings |
Faraday Future and Microvast Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Future and Microvast Holdings
The main advantage of trading using opposite Faraday Future and Microvast Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Microvast Holdings 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 Microvast Holdings will offset losses from the drop in Microvast Holdings' long position.| Faraday Future vs. HYZON Motors | Faraday Future vs. NextNav Warrant | Faraday Future vs. Inspira Technologies Oxy | Faraday Future vs. AppTech Payments Corp |
| Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. EVgo Equity Warrants | Microvast Holdings vs. Paysafe Ltd Wt | Microvast Holdings vs. Faraday Future Intelligent |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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