Correlation Between Aeva Technologies and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Innoviz Technologies 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 Aeva Technologies and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeva Technologies and Innoviz Technologies, you can compare the effects of market volatilities on Aeva Technologies and Innoviz Technologies 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 Aeva Technologies with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Innoviz Technologies.
Diversification Opportunities for Aeva Technologies and Innoviz Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aeva and Innoviz is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Aeva Technologies 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 Aeva Technologies are associated (or correlated) with Innoviz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innoviz Technologies has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Aeva Technologies and Innoviz Technologies
Given the investment horizon of 90 days Aeva Technologies is expected to under-perform the Innoviz Technologies. In addition to that, Aeva Technologies is 1.17 times more volatile than Innoviz Technologies. It trades about -0.03 of its total potential returns per unit of risk. Innoviz Technologies is currently generating about -0.03 per unit of volatility. If you would invest 402.00 in Innoviz Technologies on March 12, 2024 and sell it today you would lose (299.00) from holding Innoviz Technologies or give up 74.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aeva Technologies vs. Innoviz Technologies
Performance |
Timeline |
Aeva Technologies |
Innoviz Technologies |
Aeva Technologies and Innoviz Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aeva Technologies and Innoviz Technologies
The main advantage of trading using opposite Aeva Technologies and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies position performs unexpectedly, Innoviz Technologies 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 Innoviz Technologies will offset losses from the drop in Innoviz Technologies' long position.Aeva Technologies vs. Allison Transmission Holdings | Aeva Technologies vs. LKQ Corporation | Aeva Technologies vs. Lear Corporation | Aeva Technologies vs. Gentex |
Innoviz Technologies vs. Allison Transmission Holdings | Innoviz Technologies vs. LKQ Corporation | Innoviz Technologies vs. Lear Corporation | Innoviz Technologies vs. Gentex |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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