Correlation Between Rivian Automotive and Evofem Biosciences
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Evofem Biosciences 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 Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Evofem Biosciences, you can compare the effects of market volatilities on Rivian Automotive and Evofem Biosciences 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 Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Evofem Biosciences.
Diversification Opportunities for Rivian Automotive and Evofem Biosciences
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rivian and Evofem is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences 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 Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Evofem Biosciences go up and down completely randomly.
Pair Corralation between Rivian Automotive and Evofem Biosciences
Given the investment horizon of 90 days Rivian Automotive is expected to generate 0.36 times more return on investment than Evofem Biosciences. However, Rivian Automotive is 2.8 times less risky than Evofem Biosciences. It trades about 0.01 of its potential returns per unit of risk. Evofem Biosciences is currently generating about -0.09 per unit of risk. If you would invest 1,758 in Rivian Automotive on September 3, 2024 and sell it today you would lose (571.00) from holding Rivian Automotive or give up 32.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 26.95% |
| Values | Daily Returns |
Rivian Automotive vs. Evofem Biosciences
Performance |
| Timeline |
| Rivian Automotive |
| Evofem Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rivian Automotive and Evofem Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Evofem Biosciences
The main advantage of trading using opposite Rivian Automotive and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.| Rivian Automotive vs. GreenPower Motor | Rivian Automotive vs. ZEEKR Intelligent Technology | Rivian Automotive vs. Volcon Inc | Rivian Automotive vs. Ford Motor |
| Evofem Biosciences vs. Sabra Healthcare REIT | Evofem Biosciences vs. ChampionX | Evofem Biosciences vs. Dream Finders Homes | Evofem Biosciences vs. Parker Hannifin |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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