Correlation Between Aston Martin and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both Aston Martin and Rivian Automotive 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 Aston Martin and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Rivian Automotive, you can compare the effects of market volatilities on Aston Martin and Rivian Automotive 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 Aston Martin with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Rivian Automotive.
Diversification Opportunities for Aston Martin and Rivian Automotive
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aston and Rivian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with Rivian Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivian Automotive has no effect on the direction of Aston Martin i.e., Aston Martin and Rivian Automotive go up and down completely randomly.
Pair Corralation between Aston Martin and Rivian Automotive
Assuming the 90 days horizon Aston Martin Lagonda is expected to generate 1.21 times more return on investment than Rivian Automotive. However, Aston Martin is 1.21 times more volatile than Rivian Automotive. It trades about 0.11 of its potential returns per unit of risk. Rivian Automotive is currently generating about 0.08 per unit of risk. If you would invest 136.00 in Aston Martin Lagonda on August 28, 2024 and sell it today you would earn a total of 17.00 from holding Aston Martin Lagonda or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Rivian Automotive
Performance |
| Timeline |
| Aston Martin Lagonda |
| Rivian Automotive |
Aston Martin and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Rivian Automotive
The main advantage of trading using opposite Aston Martin and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, Rivian Automotive 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 Rivian Automotive will offset losses from the drop in Rivian Automotive's long position.| Aston Martin vs. Polestar Automotive Holding | Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Mercedes Benz Group AG | Aston Martin vs. Porsche Automobile Holding |
| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla 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 the Stocks Directory module to find actively traded stocks across global markets.
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