Correlation Between Rivian Automotive and Hyzon Motors
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Hyzon Motors 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 Hyzon Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Hyzon Motors, you can compare the effects of market volatilities on Rivian Automotive and Hyzon Motors 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 Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Hyzon Motors.
Diversification Opportunities for Rivian Automotive and Hyzon Motors
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rivian and Hyzon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors 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 Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Hyzon Motors go up and down completely randomly.
Pair Corralation between Rivian Automotive and Hyzon Motors
Given the investment horizon of 90 days Rivian Automotive is expected to generate 0.36 times more return on investment than Hyzon Motors. However, Rivian Automotive is 2.79 times less risky than Hyzon Motors. It trades about -0.18 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.26 per unit of risk. If you would invest 1,421 in Rivian Automotive on November 9, 2024 and sell it today you would lose (141.00) from holding Rivian Automotive or give up 9.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. Hyzon Motors
Performance |
| Timeline |
| Rivian Automotive |
| Hyzon Motors |
Rivian Automotive and Hyzon Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Hyzon Motors
The main advantage of trading using opposite Rivian Automotive and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Hyzon Motors 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 Hyzon Motors will offset losses from the drop in Hyzon Motors' long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Hyzon Motors vs. Mullen Automotive | Hyzon Motors vs. Canoo Inc | Hyzon Motors vs. Faraday Future Intelligent | Hyzon Motors vs. Polestar Automotive Holding |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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