Correlation Between Rivian Automotive and Where Food

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

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

Diversification Opportunities for Rivian Automotive and Where Food

0.67

Correlation Coefficient

Rivian Automotive  Where Food

Poor diversification

The 3 months correlation between Rivian and Where is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Where Food go up and down completely randomly.

Pair Corralation between Rivian Automotive and Where Food

Given the investment horizon of 90 days Rivian Automotive is expected to generate 2.15 times more return on investment than Where Food. However, Rivian Automotive is 2.15 times more volatile than Where Food Comes. It trades about 0.01 of its potential returns per unit of risk. Where Food Comes is currently generating about 0.0 per unit of risk. If you would invest  1,734  in Rivian Automotive on September 23, 2024 and sell it today you would lose (351.00) from holding Rivian Automotive or give up 20.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Rivian Automotive  vs.  Where Food Comes

Rivian Automotive

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rivian Automotive are ranked lower than 5 (%) 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.

Where Food Comes

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rivian Automotive and Where Food

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

The idea behind Rivian Automotive and Where Food Comes 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..