Correlation Between NYSE Composite and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Rivian Automotive, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Rivian Automotive.
Diversification Opportunities for NYSE Composite and Rivian Automotive
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Rivian is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Rivian Automotive go up and down completely randomly.
Pair Corralation between NYSE Composite and Rivian Automotive
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.27 times more return on investment than Rivian Automotive. However, NYSE Composite is 3.72 times less risky than Rivian Automotive. It trades about 0.32 of its potential returns per unit of risk. Rivian Automotive is currently generating about -0.18 per unit of risk. If you would invest 1,924,074 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 91,684 from holding NYSE Composite or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Rivian Automotive
Performance |
| Timeline |
NYSE Composite and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Rivian Automotive
Pair trading matchups for Rivian Automotive
Pair Trading with NYSE Composite and Rivian Automotive
The main advantage of trading using opposite NYSE Composite and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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