Correlation Between Macys and Faraday Future

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

Diversification Opportunities for Macys and Faraday Future

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Macys and Faraday is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc 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 Macys 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 Macys Inc 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 Macys i.e., Macys and Faraday Future go up and down completely randomly.

Pair Corralation between Macys and Faraday Future

Taking into account the 90-day investment horizon Macys Inc is expected to generate 0.38 times more return on investment than Faraday Future. However, Macys Inc is 2.64 times less risky than Faraday Future. It trades about 0.05 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.15 per unit of risk. If you would invest  1,683  in Macys Inc on July 6, 2022 and sell it today you would earn a total of  47.00  from holding Macys Inc or generate 2.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Macys Inc  vs.  Faraday Future Intelligent

 Performance (%) 
       Timeline  
Macys Inc 
Macys Performance
0 of 100
Over the last 90 days Macys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady primary indicators, Macys is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Macys 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

Macys and Faraday Future Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Macys and Faraday Future

The main advantage of trading using opposite Macys and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.
Macys vs. Amazon Inc
The idea behind Macys Inc 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.
Faraday Future 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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