Correlation Between Rivian Automotive and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Geely Automobile Holdings, you can compare the effects of market volatilities on Rivian Automotive and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Geely Automobile.
Diversification Opportunities for Rivian Automotive and Geely Automobile
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rivian and Geely is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Geely Automobile go up and down completely randomly.
Pair Corralation between Rivian Automotive and Geely Automobile
Given the investment horizon of 90 days Rivian Automotive is expected to under-perform the Geely Automobile. In addition to that, Rivian Automotive is 1.26 times more volatile than Geely Automobile Holdings. It trades about -0.03 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.16 per unit of volatility. If you would invest 181.00 in Geely Automobile Holdings on December 2, 2024 and sell it today you would earn a total of 48.00 from holding Geely Automobile Holdings or generate 26.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rivian Automotive vs. Geely Automobile Holdings
Performance |
Timeline |
Rivian Automotive |
Geely Automobile Holdings |
Rivian Automotive and Geely Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rivian Automotive and Geely Automobile
The main advantage of trading using opposite Rivian Automotive and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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