Correlation Between Polestar Automotive and Faraday Future
Can any of the company-specific risk be diversified away by investing in both Polestar Automotive 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 Polestar Automotive and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polestar Automotive Holding and Faraday Future Intelligent, you can compare the effects of market volatilities on Polestar Automotive 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 Polestar Automotive with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polestar Automotive and Faraday Future.
Diversification Opportunities for Polestar Automotive and Faraday Future
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polestar and Faraday is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Polestar Automotive Holding 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 Polestar Automotive 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 Polestar Automotive Holding 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 Polestar Automotive i.e., Polestar Automotive and Faraday Future go up and down completely randomly.
Pair Corralation between Polestar Automotive and Faraday Future
Given the investment horizon of 90 days Polestar Automotive Holding is expected to generate 0.4 times more return on investment than Faraday Future. However, Polestar Automotive Holding is 2.51 times less risky than Faraday Future. It trades about 0.07 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.08 per unit of risk. If you would invest 77.00 in Polestar Automotive Holding on August 24, 2024 and sell it today you would earn a total of 33.00 from holding Polestar Automotive Holding or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polestar Automotive Holding vs. Faraday Future Intelligent
Performance |
| Timeline |
| Polestar Automotive |
| Faraday Future Intel |
Polestar Automotive and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polestar Automotive and Faraday Future
The main advantage of trading using opposite Polestar Automotive and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polestar Automotive 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.| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Nio Class A |
| Faraday Future vs. Lucid Group | Faraday Future vs. Rivian Automotive | Faraday Future vs. Polestar Automotive Holding | Faraday Future 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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