Correlation Between Rivian Automotive and Seneca Foods

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Can any of the company-specific risk be diversified away by investing in both Rivian Automotive and Seneca Foods 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 Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rivian Automotive and Seneca Foods Cp, you can compare the effects of market volatilities on Rivian Automotive and Seneca Foods 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 Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivian Automotive and Seneca Foods.

Diversification Opportunities for Rivian Automotive and Seneca Foods

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Rivian and Seneca is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive Inc and Seneca Foods Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Cp 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 Seneca Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seneca Foods Cp has no effect on the direction of Rivian Automotive i.e., Rivian Automotive and Seneca Foods go up and down completely randomly.

Pair Corralation between Rivian Automotive and Seneca Foods

Given the investment horizon of 90 days Rivian Automotive is expected to under-perform the Seneca Foods. In addition to that, Rivian Automotive is 2.65 times more volatile than Seneca Foods Cp. It trades about -0.14 of its total potential returns per unit of risk. Seneca Foods Cp is currently generating about 0.0 per unit of volatility. If you would invest  6,311  in Seneca Foods Cp on August 31, 2022 and sell it today you would lose (31.00)  from holding Seneca Foods Cp or give up 0.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Rivian Automotive Inc  vs.  Seneca Foods Cp

 Performance (%) 
       Timeline  
Rivian Automotive 
Rivian Performance
0 of 100
Over the last 90 days Rivian Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Rivian Automotive is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Rivian Price Channel

Seneca Foods Cp 
Seneca Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Cp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Seneca Price Channel

Rivian Automotive and Seneca Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rivian Automotive and Seneca Foods

The main advantage of trading using opposite Rivian Automotive and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive position performs unexpectedly, Seneca Foods 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 Seneca Foods will offset losses from the drop in Seneca Foods' long position.
Rivian Automotive vs. CGI Group
The idea behind Rivian Automotive and Seneca Foods Cp 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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