Correlation Between Rivian Automotive and Gentera SAB
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Gentera SAB 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 Gentera SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Gentera SAB de, you can compare the effects of market volatilities on Rivian Automotive and Gentera SAB 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 Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Gentera SAB.
Diversification Opportunities for Rivian Automotive and Gentera SAB
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Gentera is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de 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 Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Gentera SAB go up and down completely randomly.
Pair Corralation between Rivian Automotive and Gentera SAB
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.5 times less return on investment than Gentera SAB. In addition to that, Rivian Automotive is 1.92 times more volatile than Gentera SAB de. It trades about 0.07 of its total potential returns per unit of risk. Gentera SAB de is currently generating about 0.21 per unit of volatility. If you would invest 119.00 in Gentera SAB de on August 29, 2024 and sell it today you would earn a total of 17.00 from holding Gentera SAB de or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rivian Automotive vs. Gentera SAB de
Performance |
| Timeline |
| Rivian Automotive |
| Gentera SAB de |
Rivian Automotive and Gentera SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Gentera SAB
The main advantage of trading using opposite Rivian Automotive and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Gentera SAB vs. Apple Inc | Gentera SAB vs. Microsoft | Gentera SAB vs. Alphabet Inc Class C | Gentera SAB vs. Meta Platforms |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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