Correlation Between Rivian Automotive and LOBO EV

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

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

Diversification Opportunities for Rivian Automotive and LOBO EV

-0.51

Correlation Coefficient

Rivian Automotive  LOBO EV

Excellent diversification

The 3 months correlation between Rivian and LOBO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and LOBO EV TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOBO EV TECHNOLOGIES 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 LOBO EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOBO EV TECHNOLOGIES has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and LOBO EV go up and down completely randomly.

Pair Corralation between Rivian Automotive and LOBO EV

Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.37 times less return on investment than LOBO EV. But when comparing it to its historical volatility, Rivian Automotive is 1.79 times less risky than LOBO EV. It trades about 0.01 of its potential returns per unit of risk. LOBO EV TECHNOLOGIES is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  347.00  in LOBO EV TECHNOLOGIES on August 31, 2024 and sell it today you would lose (125.00) from holding LOBO EV TECHNOLOGIES or give up 36.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.9%
Values	Daily Returns

Rivian Automotive  vs.  LOBO EV TECHNOLOGIES

Rivian Automotive

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, Rivian Automotive is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

LOBO EV TECHNOLOGIES

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LOBO EV TECHNOLOGIES are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental drivers, LOBO EV displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rivian Automotive and LOBO EV

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

The idea behind Rivian Automotive and LOBO EV TECHNOLOGIES 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.