Correlation Between Rivian Automotive and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Fast Retailing 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 Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Fast Retailing Co, you can compare the effects of market volatilities on Rivian Automotive and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Fast Retailing.
Diversification Opportunities for Rivian Automotive and Fast Retailing
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rivian and Fast is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Fast Retailing go up and down completely randomly.
Pair Corralation between Rivian Automotive and Fast Retailing
Given the investment horizon of 90 days Rivian Automotive is expected to generate 4.82 times more return on investment than Fast Retailing. However, Rivian Automotive is 4.82 times more volatile than Fast Retailing Co. It trades about 0.14 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.11 per unit of risk. If you would invest 1,047 in Rivian Automotive on August 30, 2024 and sell it today you would earn a total of 175.00 from holding Rivian Automotive or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rivian Automotive vs. Fast Retailing Co
Performance |
| Timeline |
| Rivian Automotive |
| Fast Retailing |
Rivian Automotive and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Fast Retailing
The main advantage of trading using opposite Rivian Automotive and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores | Fast Retailing vs. Burlington Stores |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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