Correlation Between Faraday Future and Mingteng International

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

Diversification Opportunities for Faraday Future and Mingteng International

0.26

Correlation Coefficient

Faraday Future  Mingteng International

Modest diversification

The 3 months correlation between Faraday and Mingteng is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Future Intelligent and Mingteng International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingteng International 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 Mingteng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingteng International has no effect on the direction of Faraday Future i.e., Faraday Future and Mingteng International go up and down completely randomly.

Pair Corralation between Faraday Future and Mingteng International

Given the investment horizon of 90 days Faraday Future Intelligent is expected to generate 3.09 times more return on investment than Mingteng International. However, Faraday Future is 3.09 times more volatile than Mingteng International. It trades about 0.08 of its potential returns per unit of risk. Mingteng International is currently generating about 0.0 per unit of risk. If you would invest  113.00  in Faraday Future Intelligent on December 2, 2024 and sell it today you would earn a total of  23.00  from holding Faraday Future Intelligent or generate 20.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Faraday Future Intelligent  vs.  Mingteng International

Faraday Future Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Faraday Future Intelligent are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Faraday Future exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mingteng International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mingteng International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Mingteng International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Faraday Future and Mingteng International

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

The idea behind Faraday Future Intelligent and Mingteng International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.