Correlation Between Faraday Future and Norwegian Cruise

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Faraday Future and Norwegian Cruise 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 Norwegian Cruise 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 Norwegian Cruise Ord, you can compare the effects of market volatilities on Faraday Future and Norwegian Cruise 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 Norwegian Cruise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Future and Norwegian Cruise.

Diversification Opportunities for Faraday Future and Norwegian Cruise

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Faraday and Norwegian is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Norwegian Cruise Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Cruise Ord 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 Norwegian Cruise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Cruise Ord has no effect on the direction of Faraday Future i.e., Faraday Future and Norwegian Cruise go up and down completely randomly.

Pair Corralation between Faraday Future and Norwegian Cruise

Given the investment horizon of 90 days Faraday Future Intelligent is expected to under-perform the Norwegian Cruise. In addition to that, Faraday Future is 1.7 times more volatile than Norwegian Cruise Ord. It trades about -0.23 of its total potential returns per unit of risk. Norwegian Cruise Ord is currently generating about -0.1 per unit of volatility. If you would invest  1,301  in Norwegian Cruise Ord on July 3, 2022 and sell it today you would lose (165.00)  from holding Norwegian Cruise Ord or give up 12.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Faraday Future Intelligent  vs.  Norwegian Cruise Ord

 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

Norwegian Cruise Ord 
Norwegian Performance
0 of 100
Over the last 90 days Norwegian Cruise Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Norwegian Cruise is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Norwegian Price Channel

Faraday Future and Norwegian Cruise Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Faraday Future and Norwegian Cruise

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

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go