Correlation Between Rivian Automotive and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and HE Equipment 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 HE Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and HE Equipment Services, you can compare the effects of market volatilities on Rivian Automotive and HE Equipment 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 HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and HE Equipment.
Diversification Opportunities for Rivian Automotive and HE Equipment
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rivian and HEES is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services 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 HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and HE Equipment go up and down completely randomly.
Pair Corralation between Rivian Automotive and HE Equipment
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.69 times more return on investment than HE Equipment. However, Rivian Automotive is 1.69 times more volatile than HE Equipment Services. It trades about 0.08 of its potential returns per unit of risk. HE Equipment Services is currently generating about 0.11 per unit of risk. If you would invest 1,086 in Rivian Automotive on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Rivian Automotive or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. HE Equipment Services
Performance |
| Timeline |
| Rivian Automotive |
| HE Equipment Services |
Rivian Automotive and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and HE Equipment
The main advantage of trading using opposite Rivian Automotive and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Lucid Group | Rivian Automotive vs. Tesla Inc | Rivian Automotive vs. Mullen Automotive |
| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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