Correlation Between Faraday Future and Build-A-Bear Workshop

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

Diversification Opportunities for Faraday Future and Build-A-Bear Workshop

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Faraday and Build-A-Bear is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Build-A-Bear Workshop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Build-A-Bear Workshop 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 Build-A-Bear Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Build-A-Bear Workshop has no effect on the direction of Faraday Future i.e., Faraday Future and Build-A-Bear Workshop go up and down completely randomly.

Pair Corralation between Faraday Future and Build-A-Bear Workshop

Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the Build-A-Bear Workshop. In addition to that, Faraday Future is 2.0 times more volatile than Build-A-Bear Workshop. It trades about -0.08 of its total potential returns per unit of risk. Build-A-Bear Workshop is currently generating about 0.02 per unit of volatility. If you would invest  1,387  in Build-A-Bear Workshop on July 3, 2022 and sell it today you would lose (54.00)  from holding Build-A-Bear Workshop or give up 3.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Faraday Future Intelligent  vs.  Build-A-Bear Workshop

 Performance (%) 
       Timeline  
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 conflicting performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Faraday Price Channel

Build-A-Bear Workshop 
Build-A-Bear Performance
0 of 100
Over the last 90 days Build-A-Bear Workshop 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 fundamental drivers remain fairly stable which may send shares a bit higher in November 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Build-A-Bear Price Channel

Faraday Future and Build-A-Bear Workshop Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Faraday Future and Build-A-Bear Workshop

The main advantage of trading using opposite Faraday Future and Build-A-Bear Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Build-A-Bear Workshop 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 Build-A-Bear Workshop will offset losses from the drop in Build-A-Bear Workshop's long position.
Faraday Future vs. Amazon Inc
The idea behind Faraday Future Intelligent and Build-A-Bear Workshop 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.
Build-A-Bear Workshop vs. Best Buy Company
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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