Correlation Between BorgWarner and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both BorgWarner 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 BorgWarner and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BorgWarner and Innoviz Technologies, you can compare the effects of market volatilities on BorgWarner 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 BorgWarner with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BorgWarner and Innoviz Technologies.
Diversification Opportunities for BorgWarner and Innoviz Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BorgWarner and Innoviz is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BorgWarner and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and BorgWarner 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 BorgWarner 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 BorgWarner i.e., BorgWarner and Innoviz Technologies go up and down completely randomly.
Pair Corralation between BorgWarner and Innoviz Technologies
Considering the 90-day investment horizon BorgWarner is expected to generate 6.98 times less return on investment than Innoviz Technologies. But when comparing it to its historical volatility, BorgWarner is 3.64 times less risky than Innoviz Technologies. It trades about 0.02 of its potential returns per unit of risk. Innoviz Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Innoviz Technologies on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Innoviz Technologies or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BorgWarner vs. Innoviz Technologies
Performance |
| Timeline |
| BorgWarner |
| Innoviz Technologies |
BorgWarner and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BorgWarner and Innoviz Technologies
The main advantage of trading using opposite BorgWarner and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BorgWarner 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.| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
| Innoviz Technologies vs. Aeye Inc | Innoviz Technologies vs. Luminar Technologies | Innoviz Technologies vs. Hesai Group American | Innoviz Technologies vs. Mobileye Global Class |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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