Correlation Between Apple and Faraday Future
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Faraday Future Intelligent, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Faraday Future.
Diversification Opportunities for Apple and Faraday Future
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apple and Faraday is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Apple 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 Apple 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 Apple 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 Apple i.e., Apple and Faraday Future go up and down completely randomly.
Pair Corralation between Apple and Faraday Future
Given the investment horizon of 90 days Apple Inc is expected to generate 0.17 times more return on investment than Faraday Future. However, Apple Inc is 5.87 times less risky than Faraday Future. It trades about -0.01 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.34 per unit of risk. If you would invest 16,971 in Apple Inc on January 26, 2024 and sell it today you would lose (69.00) from holding Apple Inc or give up 0.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc vs. Faraday Future Intelligent
Performance |
Timeline |
Apple Inc |
Faraday Future Intel |
Apple and Faraday Future Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and Faraday Future
The main advantage of trading using opposite Apple and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and Faraday Future Intelligent 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.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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |