Correlation Between Innoviz Technologies and BorgWarner
Can any of the company-specific risk be diversified away by investing in both Innoviz Technologies and BorgWarner 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 Innoviz Technologies and BorgWarner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innoviz Technologies and BorgWarner, you can compare the effects of market volatilities on Innoviz Technologies and BorgWarner 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 Innoviz Technologies with a short position of BorgWarner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innoviz Technologies and BorgWarner.
Diversification Opportunities for Innoviz Technologies and BorgWarner
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innoviz and BorgWarner is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner and Innoviz 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 Innoviz Technologies are associated (or correlated) with BorgWarner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BorgWarner has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and BorgWarner go up and down completely randomly.
Pair Corralation between Innoviz Technologies and BorgWarner
Given the investment horizon of 90 days Innoviz Technologies is expected to under-perform the BorgWarner. In addition to that, Innoviz Technologies is 2.44 times more volatile than BorgWarner. It trades about -0.11 of its total potential returns per unit of risk. BorgWarner is currently generating about -0.01 per unit of volatility. If you would invest 3,571 in BorgWarner on August 25, 2024 and sell it today you would lose (159.00) from holding BorgWarner or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innoviz Technologies vs. BorgWarner
Performance |
| Timeline |
| Innoviz Technologies |
| BorgWarner |
Innoviz Technologies and BorgWarner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innoviz Technologies and BorgWarner
The main advantage of trading using opposite Innoviz Technologies and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, BorgWarner 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 BorgWarner will offset losses from the drop in BorgWarner's long position.| Innoviz Technologies vs. Aeye Inc | Innoviz Technologies vs. Luminar Technologies | Innoviz Technologies vs. Hesai Group American | Innoviz Technologies vs. Mobileye Global Class |
| BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation | BorgWarner vs. Commercial Vehicle Group | BorgWarner 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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