Correlation Between Innoviz Technologies and Stoneridge
Can any of the company-specific risk be diversified away by investing in both Innoviz Technologies and Stoneridge 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 Stoneridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innoviz Technologies and Stoneridge, you can compare the effects of market volatilities on Innoviz Technologies and Stoneridge 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 Stoneridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innoviz Technologies and Stoneridge.
Diversification Opportunities for Innoviz Technologies and Stoneridge
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innoviz and Stoneridge is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Stoneridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoneridge 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 Stoneridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoneridge has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Stoneridge go up and down completely randomly.
Pair Corralation between Innoviz Technologies and Stoneridge
Given the investment horizon of 90 days Innoviz Technologies is expected to generate 3.6 times more return on investment than Stoneridge. However, Innoviz Technologies is 3.6 times more volatile than Stoneridge. It trades about 0.24 of its potential returns per unit of risk. Stoneridge is currently generating about 0.04 per unit of risk. If you would invest 105.00 in Innoviz Technologies on October 20, 2024 and sell it today you would earn a total of 57.00 from holding Innoviz Technologies or generate 54.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innoviz Technologies vs. Stoneridge
Performance |
| Timeline |
| Innoviz Technologies |
| Stoneridge |
Innoviz Technologies and Stoneridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innoviz Technologies and Stoneridge
The main advantage of trading using opposite Innoviz Technologies and Stoneridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, Stoneridge 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 Stoneridge will offset losses from the drop in Stoneridge'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 |
| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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