Correlation Between Faraday Future and Walmart

Can any of the company-specific risk be diversified away by investing in both Faraday Future and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Faraday Future and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Walmart.

Diversification Opportunities for Faraday Future and Walmart

-0.92

Correlation Coefficient

Faraday Future  Walmart

Pay attention - limited upside

The 3 months correlation between Faraday and Walmart is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Faraday Future i.e., Faraday Future and Walmart go up and down completely randomly.

Pair Corralation between Faraday Future and Walmart

Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the Walmart. In addition to that, Faraday Future is 13.14 times more volatile than Walmart. It trades about -0.33 of its total potential returns per unit of risk. Walmart is currently generating about -0.05 per unit of volatility. If you would invest  6,057  in Walmart on January 24, 2024 and sell it today you would lose (43.00) from holding Walmart or give up 0.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Faraday Future Intelligent  vs.  Walmart

Faraday Future Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Faraday Future Intelligent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Walmart

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Faraday Future and Walmart

The main advantage of trading using opposite Faraday Future and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.

The idea behind Faraday Future Intelligent and Walmart 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.