Correlation Between Capital Clean and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both Capital Clean 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 Capital Clean and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Rivian Automotive, you can compare the effects of market volatilities on Capital Clean 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 Capital Clean with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Rivian Automotive.
Diversification Opportunities for Capital Clean and Rivian Automotive
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and Rivian is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and Capital Clean 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 Capital Clean Energy 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 Capital Clean i.e., Capital Clean and Rivian Automotive go up and down completely randomly.
Pair Corralation between Capital Clean and Rivian Automotive
Given the investment horizon of 90 days Capital Clean Energy is expected to under-perform the Rivian Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Capital Clean Energy is 4.17 times less risky than Rivian Automotive. The stock trades about -0.1 of its potential returns per unit of risk. The Rivian Automotive is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Rivian Automotive on September 4, 2024 and sell it today you would earn a total of 158.00 from holding Rivian Automotive or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Rivian Automotive
Performance |
| Timeline |
| Capital Clean Energy |
| Rivian Automotive |
Capital Clean and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Rivian Automotive
The main advantage of trading using opposite Capital Clean and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean 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.| Capital Clean vs. Sphere Entertainment Co | Capital Clean vs. Herc Holdings | Capital Clean vs. Reservoir Media | Capital Clean vs. Triton International Limited |
| Rivian Automotive vs. Tesla Inc | Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Lucid Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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