Correlation Between Innovid Corp and Platinum

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

By analyzing existing cross correlation between Innovid Corp and Platinum, you can compare the effects of market volatilities on Innovid Corp and Platinum 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 Innovid Corp with a short position of Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovid Corp and Platinum.

Diversification Opportunities for Innovid Corp and Platinum

-0.33

Correlation Coefficient

Innovid Corp  Platinum

Very good diversification

The 3 months correlation between Innovid and Platinum is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Innovid Corp and Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum and Innovid Corp 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 Innovid Corp are associated (or correlated) with Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum has no effect on the direction of Innovid Corp i.e., Innovid Corp and Platinum go up and down completely randomly.

Pair Corralation between Innovid Corp and Platinum

Considering the 90-day investment horizon Innovid Corp is expected to under-perform the Platinum. In addition to that, Innovid Corp is 2.76 times more volatile than Platinum. It trades about -0.06 of its total potential returns per unit of risk. Platinum is currently generating about 0.03 per unit of volatility. If you would invest  98,980  in Platinum on March 13, 2024 and sell it today you would earn a total of  1,320  from holding Platinum or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Innovid Corp  vs.  Platinum

Innovid Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Innovid Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Innovid Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Platinum

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Platinum may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Innovid Corp and Platinum

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

The idea behind Innovid Corp and Platinum 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.