Correlation Between Rivian Automotive and CLP Holdings
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and CLP Holdings 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 CLP Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and CLP Holdings, you can compare the effects of market volatilities on Rivian Automotive and CLP Holdings 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 CLP Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and CLP Holdings.
Diversification Opportunities for Rivian Automotive and CLP Holdings
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rivian and CLP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and CLP Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLP Holdings 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 CLP Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLP Holdings has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and CLP Holdings go up and down completely randomly.
Pair Corralation between Rivian Automotive and CLP Holdings
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.48 times less return on investment than CLP Holdings. In addition to that, Rivian Automotive is 3.43 times more volatile than CLP Holdings. It trades about 0.01 of its total potential returns per unit of risk. CLP Holdings is currently generating about 0.04 per unit of volatility. If you would invest 665.00 in CLP Holdings on November 2, 2024 and sell it today you would earn a total of 166.00 from holding CLP Holdings or generate 24.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Rivian Automotive vs. CLP Holdings
Performance |
Timeline |
Rivian Automotive |
CLP Holdings |
Rivian Automotive and CLP Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rivian Automotive and CLP Holdings
The main advantage of trading using opposite Rivian Automotive and CLP Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, CLP Holdings 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 CLP Holdings will offset losses from the drop in CLP Holdings' long position.Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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