Correlation Between Mayfair Gold and Rivian Automotive

Can any of the company-specific risk be diversified away by investing in both Mayfair Gold 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 Mayfair Gold and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mayfair Gold Corp and Rivian Automotive, you can compare the effects of market volatilities on Mayfair Gold 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 Mayfair Gold with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Rivian Automotive.

Diversification Opportunities for Mayfair Gold and Rivian Automotive

-0.72

Correlation Coefficient

Mayfair Gold  Rivian Automotive

Pay attention - limited upside

The 3 months correlation between Mayfair and Rivian is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and Mayfair Gold 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 Mayfair Gold Corp 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 Mayfair Gold i.e., Mayfair Gold and Rivian Automotive go up and down completely randomly.

Pair Corralation between Mayfair Gold and Rivian Automotive

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Rivian Automotive. But the otc stock apears to be less risky and, when comparing its historical volatility, Mayfair Gold Corp is 2.14 times less risky than Rivian Automotive. The otc stock trades about -0.12 of its potential returns per unit of risk. The Rivian Automotive is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,122  in Rivian Automotive on September 28, 2024 and sell it today you would earn a total of  282.00  from holding Rivian Automotive or generate 25.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Mayfair Gold Corp  vs.  Rivian Automotive

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Rivian Automotive

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rivian Automotive are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Rivian Automotive displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mayfair Gold and Rivian Automotive

The main advantage of trading using opposite Mayfair Gold and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold 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.

The idea behind Mayfair Gold Corp and Rivian Automotive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.