Correlation Between Rivian Automotive and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Dominos Pizza 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 Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Dominos Pizza, you can compare the effects of market volatilities on Rivian Automotive and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Dominos Pizza.
Diversification Opportunities for Rivian Automotive and Dominos Pizza
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Dominos is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Dominos Pizza in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Dominos Pizza go up and down completely randomly.
Pair Corralation between Rivian Automotive and Dominos Pizza
Given the investment horizon of 90 days Rivian Automotive is expected to generate 3.45 times more return on investment than Dominos Pizza. However, Rivian Automotive is 3.45 times more volatile than Dominos Pizza. It trades about 0.14 of its potential returns per unit of risk. Dominos Pizza is currently generating about 0.22 per unit of risk. If you would invest 1,029 in Rivian Automotive on September 4, 2024 and sell it today you would earn a total of 158.00 from holding Rivian Automotive or generate 15.35% 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. Dominos Pizza
Performance |
| Timeline |
| Rivian Automotive |
| Dominos Pizza |
Rivian Automotive and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Dominos Pizza
The main advantage of trading using opposite Rivian Automotive and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| Rivian Automotive vs. Tesla Inc | Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Lucid Group | Rivian Automotive vs. Honda Motor Co |
| Dominos Pizza vs. Hyatt Hotels | Dominos Pizza vs. Smart Share Global | Dominos Pizza vs. Sweetgreen | Dominos Pizza vs. Wyndham Hotels Resorts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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