Correlation Between Honda and Faraday Future
Can any of the company-specific risk be diversified away by investing in both Honda and Faraday Future 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 Honda and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honda Motor Co and Faraday Future Intelligent, you can compare the effects of market volatilities on Honda and Faraday Future 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 Honda with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honda and Faraday Future.
Diversification Opportunities for Honda and Faraday Future
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Honda and Faraday is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Honda Motor Co and Faraday Future Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Future Intel and Honda 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 Honda Motor Co are associated (or correlated) with Faraday Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Future Intel has no effect on the direction of Honda i.e., Honda and Faraday Future go up and down completely randomly.
Pair Corralation between Honda and Faraday Future
Assuming the 90 days horizon Honda Motor Co is expected to generate 2.8 times more return on investment than Faraday Future. However, Honda is 2.8 times more volatile than Faraday Future Intelligent. It trades about 0.13 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about 0.05 per unit of risk. If you would invest 723.00 in Honda Motor Co on November 2, 2024 and sell it today you would earn a total of 217.00 from holding Honda Motor Co or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.03% |
| Values | Daily Returns |
Honda Motor Co vs. Faraday Future Intelligent
Performance |
| Timeline |
| Honda Motor |
| Faraday Future Intel |
Honda and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honda and Faraday Future
The main advantage of trading using opposite Honda and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honda position performs unexpectedly, Faraday Future 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 Faraday Future will offset losses from the drop in Faraday Future's long position.| Honda vs. Bayerische Motoren Werke | Honda vs. Volkswagen AG VZO | Honda vs. Volkswagen AG | Honda vs. Bayerische Motoren Werke |
| Faraday Future vs. HYZON Motors | Faraday Future vs. NextNav Warrant | Faraday Future vs. Inspira Technologies Oxy | Faraday Future vs. AppTech Payments Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |