Correlation Between Rivian Automotive and Simon Property
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Simon Property 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 Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Simon Property Group, you can compare the effects of market volatilities on Rivian Automotive and Simon Property 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 Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Simon Property.
Diversification Opportunities for Rivian Automotive and Simon Property
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rivian and Simon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Simon Property go up and down completely randomly.
Pair Corralation between Rivian Automotive and Simon Property
Given the investment horizon of 90 days Rivian Automotive is expected to under-perform the Simon Property. In addition to that, Rivian Automotive is 3.22 times more volatile than Simon Property Group. It trades about -0.01 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.08 per unit of volatility. If you would invest 10,869 in Simon Property Group on September 3, 2024 and sell it today you would earn a total of 7,491 from holding Simon Property Group or generate 68.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rivian Automotive vs. Simon Property Group
Performance |
| Timeline |
| Rivian Automotive |
| Simon Property Group |
Rivian Automotive and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Simon Property
The main advantage of trading using opposite Rivian Automotive and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Simon Property 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 Simon Property will offset losses from the drop in Simon Property's long position.| Rivian Automotive vs. GreenPower Motor | Rivian Automotive vs. ZEEKR Intelligent Technology | Rivian Automotive vs. Volcon Inc | Rivian Automotive vs. Ford Motor |
| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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