Correlation Between Rivian Automotive and Guangshen Railway
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Guangshen Railway 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 Guangshen Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Guangshen Railway, you can compare the effects of market volatilities on Rivian Automotive and Guangshen Railway 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 Guangshen Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Guangshen Railway.
Diversification Opportunities for Rivian Automotive and Guangshen Railway
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Guangshen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Guangshen Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangshen Railway 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 Guangshen Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangshen Railway has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Guangshen Railway go up and down completely randomly.
Pair Corralation between Rivian Automotive and Guangshen Railway
If you would invest 1,104 in Rivian Automotive on September 12, 2024 and sell it today you would earn a total of 302.00 from holding Rivian Automotive or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. Guangshen Railway
Performance |
| Timeline |
| Rivian Automotive |
| Guangshen Railway |
Rivian Automotive and Guangshen Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Guangshen Railway
The main advantage of trading using opposite Rivian Automotive and Guangshen Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Guangshen Railway 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 Guangshen Railway will offset losses from the drop in Guangshen Railway's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Tesla Inc | Rivian Automotive vs. Li Auto |
| Guangshen Railway vs. Trinity Industries | Guangshen Railway vs. CSX Corporation | Guangshen Railway vs. Norfolk Southern | Guangshen Railway vs. Greenbrier Companies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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