Correlation Between Faraday Future and Noble Rock

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

Diversification Opportunities for Faraday Future and Noble Rock

0.0

Correlation Coefficient

Faraday Future  Noble Rock

Pay attention - limited upside

The 3 months correlation between Faraday and Noble is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Noble Rock Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Rock Acquisition 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 Noble Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Rock Acquisition has no effect on the direction of Faraday Future i.e., Faraday Future and Noble Rock go up and down completely randomly.

Pair Corralation between Faraday Future and Noble Rock

Assuming the 90 days horizon Faraday Future is expected to generate 4.39 times less return on investment than Noble Rock. But when comparing it to its historical volatility, Faraday Future Intelligent is 1.71 times less risky than Noble Rock. It trades about 0.06 of its potential returns per unit of risk. Noble Rock Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3.01  in Noble Rock Acquisition on September 14, 2024 and sell it today you would earn a total of  1.39  from holding Noble Rock Acquisition or generate 46.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	19.03%
Values	Daily Returns

Faraday Future Intelligent  vs.  Noble Rock Acquisition

Faraday Future Intel

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Faraday Future Intelligent are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Faraday Future showed solid returns over the last few months and may actually be approaching a breakup point.

Noble Rock Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Rock Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Noble Rock is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Faraday Future and Noble Rock

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

The idea behind Faraday Future Intelligent and Noble Rock Acquisition 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.