Correlation Between AEye and Faraday Future
Can any of the company-specific risk be diversified away by investing in both AEye 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 AEye and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and Faraday Future Intelligent, you can compare the effects of market volatilities on AEye 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 AEye with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and Faraday Future.
Diversification Opportunities for AEye and Faraday Future
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEye and Faraday is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc 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 AEye 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 AEye Inc 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 AEye i.e., AEye and Faraday Future go up and down completely randomly.
Pair Corralation between AEye and Faraday Future
Assuming the 90 days horizon AEye Inc is expected to generate 1.75 times more return on investment than Faraday Future. However, AEye is 1.75 times more volatile than Faraday Future Intelligent. It trades about 0.14 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about 0.04 per unit of risk. If you would invest 1.20 in AEye Inc on August 29, 2024 and sell it today you would earn a total of 0.30 from holding AEye Inc or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEye Inc vs. Faraday Future Intelligent
Performance |
| Timeline |
| AEye Inc |
| Faraday Future Intel |
AEye and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and Faraday Future
The main advantage of trading using opposite AEye and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye 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.| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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