Correlation Between Kroger and Faraday Future

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Can any of the company-specific risk be diversified away by investing in both Kroger 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 Kroger and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Faraday Future Intelligent, you can compare the effects of market volatilities on Kroger 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 Kroger with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Faraday Future.

Diversification Opportunities for Kroger and Faraday Future

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Kroger and Faraday is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company 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 Kroger 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 Kroger Company 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 Kroger i.e., Kroger and Faraday Future go up and down completely randomly.

Pair Corralation between Kroger and Faraday Future

Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.29 times more return on investment than Faraday Future. However, Kroger Company is 3.45 times less risky than Faraday Future. It trades about 0.04 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.04 per unit of risk. If you would invest  3,350  in Kroger Company on June 27, 2022 and sell it today you would earn a total of  1,136  from holding Kroger Company or generate 33.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Kroger Company  vs.  Faraday Future Intelligent

 Performance (%) 
       Timeline  
Kroger Company 
Kroger Performance
0 of 100
Over the last 90 days Kroger Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Kroger Price Channel

Faraday Future Intel 
Faraday Performance
0 of 100
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 October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Faraday Price Channel

Kroger and Faraday Future Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kroger and Faraday Future

The main advantage of trading using opposite Kroger and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger 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.
Kroger vs. Industrias Bachoco SA
The idea behind Kroger Company 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.
Faraday Future vs. Industrias Bachoco SA
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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