Correlation Between Xos Equity and Faraday Future
Can any of the company-specific risk be diversified away by investing in both Xos Equity 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 Xos Equity and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Equity Warrants and Faraday Future Intelligent, you can compare the effects of market volatilities on Xos Equity 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 Xos Equity with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and Faraday Future.
Diversification Opportunities for Xos Equity and Faraday Future
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xos and Faraday is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants 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 Xos Equity 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 Xos Equity Warrants 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 Xos Equity i.e., Xos Equity and Faraday Future go up and down completely randomly.
Pair Corralation between Xos Equity and Faraday Future
Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Faraday Future. In addition to that, Xos Equity is 1.57 times more volatile than Faraday Future Intelligent. It trades about -0.29 of its total potential returns per unit of risk. Faraday Future Intelligent is currently generating about 0.0 per unit of volatility. If you would invest 2.20 in Faraday Future Intelligent on September 1, 2024 and sell it today you would lose (0.30) from holding Faraday Future Intelligent or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Equity Warrants vs. Faraday Future Intelligent
Performance |
| Timeline |
| Xos Equity Warrants |
| Faraday Future Intel |
Xos Equity and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos Equity and Faraday Future
The main advantage of trading using opposite Xos Equity and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity 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.| Xos Equity vs. Ford Motor | Xos Equity vs. General Motors | Xos Equity vs. Goodyear Tire Rubber | Xos Equity vs. Li Auto |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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