Correlation Between BBB Foods and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both BBB Foods and Rivian Automotive 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 BBB Foods and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Rivian Automotive, you can compare the effects of market volatilities on BBB Foods and Rivian Automotive 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 BBB Foods with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Rivian Automotive.
Diversification Opportunities for BBB Foods and Rivian Automotive
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBB and Rivian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and BBB Foods 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 BBB Foods are associated (or correlated) with Rivian Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivian Automotive has no effect on the direction of BBB Foods i.e., BBB Foods and Rivian Automotive go up and down completely randomly.
Pair Corralation between BBB Foods and Rivian Automotive
Given the investment horizon of 90 days BBB Foods is expected to generate 0.64 times more return on investment than Rivian Automotive. However, BBB Foods is 1.57 times less risky than Rivian Automotive. It trades about 0.12 of its potential returns per unit of risk. Rivian Automotive is currently generating about -0.01 per unit of risk. If you would invest 1,750 in BBB Foods on August 28, 2024 and sell it today you would earn a total of 1,666 from holding BBB Foods or generate 95.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.34% |
| Values | Daily Returns |
BBB Foods vs. Rivian Automotive
Performance |
| Timeline |
| BBB Foods |
| Rivian Automotive |
BBB Foods and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Rivian Automotive
The main advantage of trading using opposite BBB Foods and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, Rivian Automotive 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 Rivian Automotive will offset losses from the drop in Rivian Automotive's long position.| BBB Foods vs. Innovative Food Hldg | BBB Foods vs. Calavo Growers | BBB Foods vs. The Chefs Warehouse | BBB Foods vs. AMCON Distributing |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |