Correlation Between Rivian Automotive and NexteGO NV
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and NexteGO NV 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 NexteGO NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and NexteGO NV Ordinary, you can compare the effects of market volatilities on Rivian Automotive and NexteGO NV 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 NexteGO NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and NexteGO NV.
Diversification Opportunities for Rivian Automotive and NexteGO NV
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rivian and NexteGO is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and NexteGO NV Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexteGO NV Ordinary 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 NexteGO NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexteGO NV Ordinary has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and NexteGO NV go up and down completely randomly.
Pair Corralation between Rivian Automotive and NexteGO NV
Given the investment horizon of 90 days Rivian Automotive is expected to generate 77.55 times less return on investment than NexteGO NV. But when comparing it to its historical volatility, Rivian Automotive is 37.7 times less risky than NexteGO NV. It trades about 0.11 of its potential returns per unit of risk. NexteGO NV Ordinary is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.01 in NexteGO NV Ordinary on August 29, 2024 and sell it today you would earn a total of 0.00 from holding NexteGO NV Ordinary or generate 0.0% 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. NexteGO NV Ordinary
Performance |
| Timeline |
| Rivian Automotive |
| NexteGO NV Ordinary |
Rivian Automotive and NexteGO NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and NexteGO NV
The main advantage of trading using opposite Rivian Automotive and NexteGO NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, NexteGO NV 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 NexteGO NV will offset losses from the drop in NexteGO NV's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| NexteGO NV vs. Lululemon Athletica | NexteGO NV vs. Jeld Wen Holding | NexteGO NV vs. Summit Materials | NexteGO NV vs. GMS 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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