Correlation Between Rivian Automotive and Oasis Petroleum
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Oasis Petroleum 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 Oasis Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Oasis Petroleum, you can compare the effects of market volatilities on Rivian Automotive and Oasis Petroleum 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 Oasis Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Oasis Petroleum.
Diversification Opportunities for Rivian Automotive and Oasis Petroleum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rivian and Oasis is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Oasis Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Petroleum 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 Oasis Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Petroleum has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Oasis Petroleum go up and down completely randomly.
Pair Corralation between Rivian Automotive and Oasis Petroleum
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.48 times more return on investment than Oasis Petroleum. However, Rivian Automotive is 1.48 times more volatile than Oasis Petroleum. It trades about 0.15 of its potential returns per unit of risk. Oasis Petroleum is currently generating about 0.12 per unit of risk. If you would invest 1,047 in Rivian Automotive on August 30, 2024 and sell it today you would earn a total of 175.00 from holding Rivian Automotive or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 72.73% |
| Values | Daily Returns |
Rivian Automotive vs. Oasis Petroleum
Performance |
| Timeline |
| Rivian Automotive |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rivian Automotive and Oasis Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Oasis Petroleum
The main advantage of trading using opposite Rivian Automotive and Oasis Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Oasis Petroleum 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 Oasis Petroleum will offset losses from the drop in Oasis Petroleum's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Oasis Petroleum vs. Apple Inc | Oasis Petroleum vs. Microsoft | Oasis Petroleum vs. Alphabet Inc Class C | Oasis Petroleum vs. Meta Platforms |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |