Correlation Between Gentex and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Gentex 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 Gentex and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Innoviz Technologies, you can compare the effects of market volatilities on Gentex 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 Gentex with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Innoviz Technologies.
Diversification Opportunities for Gentex and Innoviz Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gentex and Innoviz is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Gentex 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 Gentex 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 Gentex i.e., Gentex and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Gentex and Innoviz Technologies
Given the investment horizon of 90 days Gentex is expected to generate 0.3 times more return on investment than Innoviz Technologies. However, Gentex is 3.37 times less risky than Innoviz Technologies. It trades about 0.05 of its potential returns per unit of risk. Innoviz Technologies is currently generating about -0.29 per unit of risk. If you would invest 2,937 in Gentex on August 23, 2024 and sell it today you would earn a total of 51.00 from holding Gentex or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Innoviz Technologies
Performance |
| Timeline |
| Gentex |
| Innoviz Technologies |
Gentex and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Innoviz Technologies
The main advantage of trading using opposite Gentex and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex 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.The idea behind Gentex and Innoviz Technologies 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.| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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