Correlation Between Fisker and Ferrari NV
Can any of the company-specific risk be diversified away by investing in both Fisker and Ferrari NV 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 Fisker and Ferrari NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisker Inc and Ferrari NV, you can compare the effects of market volatilities on Fisker and Ferrari NV 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 Fisker with a short position of Ferrari NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisker and Ferrari NV.
Diversification Opportunities for Fisker and Ferrari NV
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fisker and Ferrari is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fisker Inc and Ferrari NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrari NV and Fisker 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 Fisker Inc are associated (or correlated) with Ferrari NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrari NV has no effect on the direction of Fisker i.e., Fisker and Ferrari NV go up and down completely randomly.
Pair Corralation between Fisker and Ferrari NV
Considering the 90-day investment horizon Fisker is expected to generate 4.01 times less return on investment than Ferrari NV. In addition to that, Fisker is 3.64 times more volatile than Ferrari NV. It trades about 0.01 of its total potential returns per unit of risk. Ferrari NV is currently generating about 0.09 per unit of volatility. If you would invest 22,066 in Ferrari NV on August 24, 2024 and sell it today you would earn a total of 20,885 from holding Ferrari NV or generate 94.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Fisker Inc vs. Ferrari NV
Performance |
| Timeline |
| Fisker Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ferrari NV |
Fisker and Ferrari NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisker and Ferrari NV
The main advantage of trading using opposite Fisker and Ferrari NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisker position performs unexpectedly, Ferrari NV 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 Ferrari NV will offset losses from the drop in Ferrari NV's long position.The idea behind Fisker Inc and Ferrari NV 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.| Ferrari NV vs. Lucid Group | Ferrari NV vs. Rivian Automotive | Ferrari NV vs. Polestar Automotive Holding | Ferrari NV vs. Mullen Automotive |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |