Correlation Between Rivian Automotive and 126408HH9

Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and 126408HH9 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 126408HH9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rivian Automotive and CSX P 325, you can compare the effects of market volatilities on Rivian Automotive and 126408HH9 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 126408HH9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and 126408HH9.

Diversification Opportunities for Rivian Automotive and 126408HH9

-0.69

Correlation Coefficient

Rivian Automotive  126408HH9

Excellent diversification

The 3 months correlation between Rivian and 126408HH9 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and CSX P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 325 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 126408HH9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 325 has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and 126408HH9 go up and down completely randomly.

Pair Corralation between Rivian Automotive and 126408HH9

Given the investment horizon of 90 days Rivian Automotive is expected to under-perform the 126408HH9. In addition to that, Rivian Automotive is 20.4 times more volatile than CSX P 325. It trades about -0.03 of its total potential returns per unit of risk. CSX P 325 is currently generating about -0.04 per unit of volatility. If you would invest  9,685  in CSX P 325 on December 25, 2024 and sell it today you would lose (54.00) from holding CSX P 325 or give up 0.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Rivian Automotive  vs.  CSX P 325

Rivian Automotive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rivian Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

CSX P 325

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSX P 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126408HH9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rivian Automotive and 126408HH9

The main advantage of trading using opposite Rivian Automotive and 126408HH9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, 126408HH9 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 126408HH9 will offset losses from the drop in 126408HH9's long position.

The idea behind Rivian Automotive and CSX P 325 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.