Correlation Between NexteGO NV and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both NexteGO NV 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 NexteGO NV and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexteGO NV Ordinary and Rivian Automotive, you can compare the effects of market volatilities on NexteGO NV 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 NexteGO NV with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexteGO NV and Rivian Automotive.
Diversification Opportunities for NexteGO NV and Rivian Automotive
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexteGO and Rivian is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NexteGO NV Ordinary and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and NexteGO NV 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 NexteGO NV Ordinary 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 NexteGO NV i.e., NexteGO NV and Rivian Automotive go up and down completely randomly.
Pair Corralation between NexteGO NV and Rivian Automotive
Given the investment horizon of 90 days NexteGO NV Ordinary is expected to generate 20.98 times more return on investment than Rivian Automotive. However, NexteGO NV is 20.98 times more volatile than Rivian Automotive. It trades about 0.08 of its potential returns per unit of risk. Rivian Automotive is currently generating about 0.04 per unit of risk. If you would invest 1.76 in NexteGO NV Ordinary on August 29, 2024 and sell it today you would lose (1.75) from holding NexteGO NV Ordinary or give up 99.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexteGO NV Ordinary vs. Rivian Automotive
Performance |
| Timeline |
| NexteGO NV Ordinary |
| Rivian Automotive |
NexteGO NV and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexteGO NV and Rivian Automotive
The main advantage of trading using opposite NexteGO NV and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexteGO NV 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.| NexteGO NV vs. Lululemon Athletica | NexteGO NV vs. Jeld Wen Holding | NexteGO NV vs. Summit Materials | NexteGO NV vs. GMS Inc |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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