Correlation Between Rivian Automotive and Blue Biofuels
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Blue Biofuels 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 Rivian Automotive and Blue Biofuels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Blue Biofuels, you can compare the effects of market volatilities on Rivian Automotive and Blue Biofuels 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 Rivian Automotive with a short position of Blue Biofuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Blue Biofuels.
Diversification Opportunities for Rivian Automotive and Blue Biofuels
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Blue is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Blue Biofuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Biofuels and Rivian Automotive 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 Rivian Automotive are associated (or correlated) with Blue Biofuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Biofuels has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Blue Biofuels go up and down completely randomly.
Pair Corralation between Rivian Automotive and Blue Biofuels
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.01 times less return on investment than Blue Biofuels. In addition to that, Rivian Automotive is 1.16 times more volatile than Blue Biofuels. It trades about 0.14 of its total potential returns per unit of risk. Blue Biofuels is currently generating about 0.17 per unit of volatility. If you would invest 11.00 in Blue Biofuels on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Blue Biofuels or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. Blue Biofuels
Performance |
| Timeline |
| Rivian Automotive |
| Blue Biofuels |
Rivian Automotive and Blue Biofuels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Blue Biofuels
The main advantage of trading using opposite Rivian Automotive and Blue Biofuels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Blue Biofuels 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 Blue Biofuels will offset losses from the drop in Blue Biofuels' long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Blue Biofuels vs. Asia Carbon Industries | Blue Biofuels vs. Akzo Nobel NV | Blue Biofuels vs. AGC Inc ADR | Blue Biofuels vs. Arkema SA ADR |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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