Correlation Between Innoviz Technologies and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Innoviz Technologies and ECARX Holdings 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 ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innoviz Technologies and ECARX Holdings Class, you can compare the effects of market volatilities on Innoviz Technologies and ECARX Holdings 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 ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innoviz Technologies and ECARX Holdings.
Diversification Opportunities for Innoviz Technologies and ECARX Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innoviz and ECARX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and ECARX Holdings go up and down completely randomly.
Pair Corralation between Innoviz Technologies and ECARX Holdings
Given the investment horizon of 90 days Innoviz Technologies is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Innoviz Technologies is 1.44 times less risky than ECARX Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The ECARX Holdings Class is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,007 in ECARX Holdings Class on August 26, 2024 and sell it today you would lose (846.00) from holding ECARX Holdings Class or give up 84.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innoviz Technologies vs. ECARX Holdings Class
Performance |
| Timeline |
| Innoviz Technologies |
| ECARX Holdings Class |
Innoviz Technologies and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innoviz Technologies and ECARX Holdings
The main advantage of trading using opposite Innoviz Technologies and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, ECARX Holdings 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.| Innoviz Technologies vs. Aeye Inc | Innoviz Technologies vs. Luminar Technologies | Innoviz Technologies vs. Hesai Group American | Innoviz Technologies vs. Mobileye Global Class |
| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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