Correlation Between Rivian Automotive and Securitas
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Securitas 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 Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Securitas AB, you can compare the effects of market volatilities on Rivian Automotive and Securitas 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 Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Securitas.
Diversification Opportunities for Rivian Automotive and Securitas
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rivian and Securitas is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB 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 Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Securitas go up and down completely randomly.
Pair Corralation between Rivian Automotive and Securitas
Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.55 times less return on investment than Securitas. In addition to that, Rivian Automotive is 1.37 times more volatile than Securitas AB. It trades about 0.03 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.07 per unit of volatility. If you would invest 1,021 in Securitas AB on August 31, 2024 and sell it today you would earn a total of 278.00 from holding Securitas AB or generate 27.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Rivian Automotive vs. Securitas AB
Performance |
| Timeline |
| Rivian Automotive |
| Securitas AB |
Rivian Automotive and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Securitas
The main advantage of trading using opposite Rivian Automotive and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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