Correlation Between Rivian Automotive and Luminar Technologies

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Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Luminar Technologies 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 Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Luminar Technologies, you can compare the effects of market volatilities on Rivian Automotive and Luminar Technologies 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 Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Luminar Technologies.

Diversification Opportunities for Rivian Automotive and Luminar Technologies

RivianLuminarDiversified AwayRivianLuminarDiversified Away100%
-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Rivian and Luminar is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies 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 Luminar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luminar Technologies has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Luminar Technologies go up and down completely randomly.

Pair Corralation between Rivian Automotive and Luminar Technologies

Given the investment horizon of 90 days Rivian Automotive is expected to generate 0.74 times more return on investment than Luminar Technologies. However, Rivian Automotive is 1.34 times less risky than Luminar Technologies. It trades about 0.01 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.07 per unit of risk. If you would invest  1,464  in Rivian Automotive on November 26, 2024 and sell it today you would lose (268.00) from holding Rivian Automotive or give up 18.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Rivian Automotive  vs.  Luminar Technologies

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -60-40-200204060
JavaScript chart by amCharts 3.21.15RIVN LAZR
       Timeline  
Rivian Automotive 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Rivian Automotive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Rivian Automotive may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb111213141516
Luminar Technologies 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Luminar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5678910

Rivian Automotive and Luminar Technologies Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-15.55-11.64-7.74-3.84-0.0653.958.0412.1216.2120.3 0.0060.0080.0100.0120.0140.016
JavaScript chart by amCharts 3.21.15RIVN LAZR
       Returns  

Pair Trading with Rivian Automotive and Luminar Technologies

The main advantage of trading using opposite Rivian Automotive and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Luminar Technologies 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 Luminar Technologies will offset losses from the drop in Luminar Technologies' long position.
The idea behind Rivian Automotive and Luminar Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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