Correlation Between Rivian Automotive and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Hertz Global 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 Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Hertz Global Holdings, you can compare the effects of market volatilities on Rivian Automotive and Hertz Global 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 Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Hertz Global.
Diversification Opportunities for Rivian Automotive and Hertz Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rivian and Hertz is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings 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 Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Hertz Global go up and down completely randomly.
Pair Corralation between Rivian Automotive and Hertz Global
Given the investment horizon of 90 days Rivian Automotive is expected to generate 4.58 times less return on investment than Hertz Global. In addition to that, Rivian Automotive is 1.11 times more volatile than Hertz Global Holdings. It trades about 0.07 of its total potential returns per unit of risk. Hertz Global Holdings is currently generating about 0.37 per unit of volatility. If you would invest 306.00 in Hertz Global Holdings on August 29, 2024 and sell it today you would earn a total of 160.00 from holding Hertz Global Holdings or generate 52.29% 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. Hertz Global Holdings
Performance |
| Timeline |
| Rivian Automotive |
| Hertz Global Holdings |
Rivian Automotive and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Hertz Global
The main advantage of trading using opposite Rivian Automotive and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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