Correlation Between Rivian Automotive and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Flexible Solutions 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 Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Flexible Solutions International, you can compare the effects of market volatilities on Rivian Automotive and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Flexible Solutions.
Diversification Opportunities for Rivian Automotive and Flexible Solutions
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Flexible is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Flexible Solutions go up and down completely randomly.
Pair Corralation between Rivian Automotive and Flexible Solutions
Given the investment horizon of 90 days Rivian Automotive is expected to under-perform the Flexible Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Rivian Automotive is 1.29 times less risky than Flexible Solutions. The stock trades about -0.01 of its potential returns per unit of risk. The Flexible Solutions International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 328.00 in Flexible Solutions International on December 4, 2024 and sell it today you would earn a total of 216.00 from holding Flexible Solutions International or generate 65.85% 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. Flexible Solutions Internation
Performance |
| Timeline |
| Rivian Automotive |
| Flexible Solutions |
Rivian Automotive and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Flexible Solutions
The main advantage of trading using opposite Rivian Automotive and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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