Correlation Between Innoviz Technologies and Luminar Technologies
Can any of the company-specific risk be diversified away by investing in both Innoviz Technologies and Luminar 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 Innoviz Technologies and Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innoviz Technologies and Luminar Technologies, you can compare the effects of market volatilities on Innoviz Technologies and Luminar 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 Innoviz Technologies with a short position of Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innoviz Technologies and Luminar Technologies.
Diversification Opportunities for Innoviz Technologies and Luminar Technologies
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innoviz and Luminar is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies 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 Luminar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luminar Technologies has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Luminar Technologies go up and down completely randomly.
Pair Corralation between Innoviz Technologies and Luminar Technologies
Given the investment horizon of 90 days Innoviz Technologies is expected to under-perform the Luminar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Innoviz Technologies is 1.19 times less risky than Luminar Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Luminar Technologies is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 11,820 in Luminar Technologies on August 26, 2024 and sell it today you would lose (10,925) from holding Luminar Technologies or give up 92.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innoviz Technologies vs. Luminar Technologies
Performance |
| Timeline |
| Innoviz Technologies |
| Luminar Technologies |
Innoviz Technologies and Luminar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innoviz Technologies and Luminar Technologies
The main advantage of trading using opposite Innoviz Technologies and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, Luminar 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 Luminar Technologies will offset losses from the drop in Luminar Technologies' long position.| Innoviz Technologies vs. Aeye Inc | Innoviz Technologies vs. Luminar Technologies | Innoviz Technologies vs. Hesai Group American | Innoviz Technologies vs. Mobileye Global Class |
| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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