Correlation Between SentinelOne and Faraday Future

Can any of the company-specific risk be diversified away by investing in both SentinelOne 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 SentinelOne and Faraday Future into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SentinelOne and Faraday Future Intelligent, you can compare the effects of market volatilities on SentinelOne 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 SentinelOne with a short position of Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Faraday Future.

Diversification Opportunities for SentinelOne and Faraday Future

-0.02

Correlation Coefficient

SentinelOne  Faraday Future

Good diversification

The 3 months correlation between SentinelOne and Faraday is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne 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 SentinelOne 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 SentinelOne 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 SentinelOne i.e., SentinelOne and Faraday Future go up and down completely randomly.

Pair Corralation between SentinelOne and Faraday Future

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Faraday Future. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 3.58 times less risky than Faraday Future. The stock trades about -0.02 of its potential returns per unit of risk. The Faraday Future Intelligent is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Faraday Future Intelligent on May 1, 2025 and sell it today you would lose (43.00) from holding Faraday Future Intelligent or give up 15.36% of portfolio value over 90 days.

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

SentinelOne  vs.  Faraday Future Intelligent

SentinelOne

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Faraday Future Intel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Faraday Future Intelligent are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Faraday Future demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Faraday Future

The main advantage of trading using opposite SentinelOne and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne 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.

The idea behind SentinelOne 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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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 Transaction History module to view history of all your transactions and understand their impact on performance.