Correlation Between Faraday Future and Hewlett Packard

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

Diversification Opportunities for Faraday Future and Hewlett Packard

-0.29

Correlation Coefficient

Faraday Future  Hewlett Packard

Very good diversification

The 3 months correlation between Faraday and Hewlett is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Faraday Future i.e., Faraday Future and Hewlett Packard go up and down completely randomly.

Pair Corralation between Faraday Future and Hewlett Packard

Given the investment horizon of 90 days Faraday Future is expected to generate 1.9 times less return on investment than Hewlett Packard. In addition to that, Faraday Future is 6.97 times more volatile than Hewlett Packard Enterprise. It trades about 0.01 of its total potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.15 per unit of volatility. If you would invest  5,796  in Hewlett Packard Enterprise on October 26, 2024 and sell it today you would earn a total of  1,114  from holding Hewlett Packard Enterprise or generate 19.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Faraday Future Intelligent  vs.  Hewlett Packard Enterprise

Faraday Future Intel

Risk-Adjusted Performance

0 of 100

Weak

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 rather weak forward indicators, Faraday Future may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hewlett Packard Ente

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Hewlett Packard exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Faraday Future and Hewlett Packard

The main advantage of trading using opposite Faraday Future and Hewlett Packard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Future position performs unexpectedly, Hewlett Packard 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 Hewlett Packard will offset losses from the drop in Hewlett Packard's long position.

The idea behind Faraday Future Intelligent and Hewlett Packard Enterprise 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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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 the FinTech Suite module to use AI to screen and filter profitable investment opportunities.