Correlation Between Rivian Automotive and Shimmick Common
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Shimmick Common 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 Shimmick Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Shimmick Common, you can compare the effects of market volatilities on Rivian Automotive and Shimmick Common 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 Shimmick Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Shimmick Common.
Diversification Opportunities for Rivian Automotive and Shimmick Common
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rivian and Shimmick is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common 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 Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Shimmick Common go up and down completely randomly.
Pair Corralation between Rivian Automotive and Shimmick Common
Given the investment horizon of 90 days Rivian Automotive is expected to generate 0.93 times more return on investment than Shimmick Common. However, Rivian Automotive is 1.08 times less risky than Shimmick Common. It trades about 0.1 of its potential returns per unit of risk. Shimmick Common is currently generating about -0.15 per unit of risk. If you would invest 1,061 in Rivian Automotive on January 12, 2025 and sell it today you would earn a total of 86.00 from holding Rivian Automotive or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. Shimmick Common
Performance |
| Timeline |
| Rivian Automotive |
| Shimmick Common |
Rivian Automotive and Shimmick Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Shimmick Common
The main advantage of trading using opposite Rivian Automotive and Shimmick Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Shimmick Common 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 Shimmick Common will offset losses from the drop in Shimmick Common's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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