Correlation Between Faraday Future and ATT
Can any of the company-specific risk be diversified away by investing in both Faraday Future and ATT 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 Faraday Future and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Future Intelligent and ATT Inc, you can compare the effects of market volatilities on Faraday Future and ATT 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 Faraday Future with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and ATT.
Diversification Opportunities for Faraday Future and ATT
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Faraday and ATT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Faraday Future 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 Faraday Future Intelligent are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Faraday Future i.e., Faraday Future and ATT go up and down completely randomly.
Pair Corralation between Faraday Future and ATT
Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the ATT. In addition to that, Faraday Future is 7.25 times more volatile than ATT Inc. It trades about -0.16 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.01 per unit of volatility. If you would invest 1,756 in ATT Inc on December 29, 2023 and sell it today you would lose (1.00) from holding ATT Inc or give up 0.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Faraday Future Intelligent vs. ATT Inc
Performance |
Timeline |
Faraday Future Intel |
ATT Inc |
Faraday Future and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Faraday Future and ATT
The main advantage of trading using opposite Faraday Future and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.Faraday Future vs. Mobileye Global Class | Faraday Future vs. Goodyear Tire Rubber | Faraday Future vs. Quantumscape Corp | Faraday Future vs. Visteon Corp |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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