Correlation Between Nissan and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both Nissan 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 Nissan and Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissan Motor Co and Rivian Automotive, you can compare the effects of market volatilities on Nissan 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 Nissan with a short position of Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan and Rivian Automotive.
Diversification Opportunities for Nissan and Rivian Automotive
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nissan and Rivian is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nissan Motor Co and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive and Nissan 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 Nissan Motor Co 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 Nissan i.e., Nissan and Rivian Automotive go up and down completely randomly.
Pair Corralation between Nissan and Rivian Automotive
If you would invest 1,013 in Rivian Automotive on February 4, 2024 and sell it today you would lose (6.00) from holding Rivian Automotive or give up 0.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Nissan Motor Co vs. Rivian Automotive
Performance |
Timeline |
Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rivian Automotive |
Nissan and Rivian Automotive Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nissan and Rivian Automotive
The main advantage of trading using opposite Nissan and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissan 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.Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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