Correlation Between Rivian Automotive and Roma Green

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

By analyzing existing cross correlation between Rivian Automotive and Roma Green Finance, you can compare the effects of market volatilities on Rivian Automotive and Roma Green 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 Roma Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Roma Green.

Diversification Opportunities for Rivian Automotive and Roma Green

-0.4

Correlation Coefficient

Rivian Automotive  Roma Green

Very good diversification

The 3 months correlation between Rivian and Roma is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Roma Green Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roma Green Finance 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 Roma Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roma Green Finance has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Roma Green go up and down completely randomly.

Pair Corralation between Rivian Automotive and Roma Green

Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.23 times more return on investment than Roma Green. However, Rivian Automotive is 1.23 times more volatile than Roma Green Finance. It trades about 0.2 of its potential returns per unit of risk. Roma Green Finance is currently generating about -0.1 per unit of risk. If you would invest  1,059  in Rivian Automotive on October 6, 2024 and sell it today you would earn a total of  590.00  from holding Rivian Automotive or generate 55.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Rivian Automotive  vs.  Roma Green Finance

Rivian Automotive

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivian Automotive are ranked lower than 12 (%) 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.

Roma Green Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roma Green Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Rivian Automotive and Roma Green

The main advantage of trading using opposite Rivian Automotive and Roma Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Roma Green 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 Roma Green will offset losses from the drop in Roma Green's long position.

The idea behind Rivian Automotive and Roma Green Finance 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.