Correlation Between Faraday Future and Manitowoc

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

Diversification Opportunities for Faraday Future and Manitowoc

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Faraday and Manitowoc is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc 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 Manitowoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitowoc has no effect on the direction of Faraday Future i.e., Faraday Future and Manitowoc go up and down completely randomly.

Pair Corralation between Faraday Future and Manitowoc

Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the Manitowoc. In addition to that, Faraday Future is 3.28 times more volatile than Manitowoc. It trades about -0.21 of its total potential returns per unit of risk. Manitowoc is currently generating about -0.24 per unit of volatility. If you would invest  934.00  in Manitowoc on July 6, 2022 and sell it today you would lose (125.00)  from holding Manitowoc or give up 13.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Faraday Future Intelligent  vs.  Manitowoc

 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

Manitowoc 
Manitowoc Performance
0 of 100
Over the last 90 days Manitowoc 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 basic indicators 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.

Manitowoc Price Channel

Faraday Future and Manitowoc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Faraday Future and Manitowoc

The main advantage of trading using opposite Faraday Future and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Manitowoc 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 Manitowoc will offset losses from the drop in Manitowoc's long position.
Faraday Future vs. Amazon Inc
The idea behind Faraday Future Intelligent and Manitowoc 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.
Manitowoc vs. Amazon Inc
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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