Correlation Between ECARX Holdings and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings 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 ECARX Holdings and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECARX Holdings Class and Innoviz Technologies, you can compare the effects of market volatilities on ECARX Holdings 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 ECARX Holdings with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Innoviz Technologies.
Diversification Opportunities for ECARX Holdings and Innoviz Technologies
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECARX and Innoviz is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Class and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and ECARX Holdings 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 ECARX Holdings Class 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 ECARX Holdings i.e., ECARX Holdings and Innoviz Technologies go up and down completely randomly.
Pair Corralation between ECARX Holdings and Innoviz Technologies
Considering the 90-day investment horizon ECARX Holdings Class is expected to generate 1.13 times more return on investment than Innoviz Technologies. However, ECARX Holdings is 1.13 times more volatile than Innoviz Technologies. It trades about 0.08 of its potential returns per unit of risk. Innoviz Technologies is currently generating about -0.11 per unit of risk. If you would invest 116.00 in ECARX Holdings Class on August 23, 2024 and sell it today you would earn a total of 49.00 from holding ECARX Holdings Class or generate 42.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECARX Holdings Class vs. Innoviz Technologies
Performance |
| Timeline |
| ECARX Holdings Class |
| Innoviz Technologies |
ECARX Holdings and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECARX Holdings and Innoviz Technologies
The main advantage of trading using opposite ECARX Holdings and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings 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.| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
| Innoviz Technologies vs. Gentex | Innoviz Technologies vs. Adient PLC | Innoviz Technologies vs. Autoliv | Innoviz Technologies vs. Fox Factory Holding |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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