Correlation Between Rivian Automotive and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Whitbread Plc 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 Whitbread Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Whitbread plc, you can compare the effects of market volatilities on Rivian Automotive and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Whitbread Plc.
Diversification Opportunities for Rivian Automotive and Whitbread Plc
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rivian and Whitbread is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Whitbread Plc go up and down completely randomly.
Pair Corralation between Rivian Automotive and Whitbread Plc
Given the investment horizon of 90 days Rivian Automotive is expected to generate 8.04 times more return on investment than Whitbread Plc. However, Rivian Automotive is 8.04 times more volatile than Whitbread plc. It trades about 0.09 of its potential returns per unit of risk. Whitbread plc is currently generating about -0.23 per unit of risk. If you would invest 1,306 in Rivian Automotive on October 20, 2024 and sell it today you would earn a total of 115.00 from holding Rivian Automotive or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Rivian Automotive vs. Whitbread plc
Performance |
| Timeline |
| Rivian Automotive |
| Whitbread plc |
Rivian Automotive and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rivian Automotive and Whitbread Plc
The main advantage of trading using opposite Rivian Automotive and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Mullen Automotive | Rivian Automotive vs. Tesla Inc |
| Whitbread Plc vs. National CineMedia | Whitbread Plc vs. Here Media | Whitbread Plc vs. Ubisoft Entertainment | Whitbread Plc vs. Zhihu Inc ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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