Correlation Between Rivian Automotive and First Republic
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and First Republic Bank, you can compare the effects of market volatilities on Rivian Automotive and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and First Republic.
Diversification Opportunities for Rivian Automotive and First Republic
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rivian and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and First Republic go up and down completely randomly.
Pair Corralation between Rivian Automotive and First Republic
If you would invest 1,086 in Rivian Automotive on August 29, 2024 and sell it today you would earn a total of 69.00 from holding Rivian Automotive or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Rivian Automotive vs. First Republic Bank
Performance |
| Timeline |
| Rivian Automotive |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rivian Automotive and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and First Republic
The main advantage of trading using opposite Rivian Automotive and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| First Republic vs. BorgWarner | First Republic vs. Rivian Automotive | First Republic vs. Aptiv PLC | First Republic vs. U Power Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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