Correlation Between Fortinet and Faraday Future

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

Diversification Opportunities for Fortinet and Faraday Future

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fortinet and Faraday is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet 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 Fortinet 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 Fortinet 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 Fortinet i.e., Fortinet and Faraday Future go up and down completely randomly.

Pair Corralation between Fortinet and Faraday Future

Given the investment horizon of 90 days Fortinet is expected to generate 0.28 times more return on investment than Faraday Future. However, Fortinet is 3.56 times less risky than Faraday Future. It trades about 0.03 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.23 per unit of risk. If you would invest  4,855  in Fortinet on July 3, 2022 and sell it today you would earn a total of  58.00  from holding Fortinet or generate 1.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fortinet  vs.  Faraday Future Intelligent

 Performance (%) 
       Timeline  
Fortinet 
Fortinet Performance
0 of 100
Over the last 90 days Fortinet 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 basic indicators remain comparatively stable which may send shares a bit higher in November 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fortinet 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 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

Fortinet and Faraday Future Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortinet and Faraday Future

The main advantage of trading using opposite Fortinet and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet 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.
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The idea behind Fortinet 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.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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