Correlation Between Innoviz Technologies and AEye
Can any of the company-specific risk be diversified away by investing in both Innoviz Technologies and AEye 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 AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innoviz Technologies and AEye Inc, you can compare the effects of market volatilities on Innoviz Technologies and AEye 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 AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innoviz Technologies and AEye.
Diversification Opportunities for Innoviz Technologies and AEye
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innoviz and AEye is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc 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 AEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEye Inc has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and AEye go up and down completely randomly.
Pair Corralation between Innoviz Technologies and AEye
Assuming the 90 days horizon Innoviz Technologies is expected to generate 6.31 times more return on investment than AEye. However, Innoviz Technologies is 6.31 times more volatile than AEye Inc. It trades about 0.13 of its potential returns per unit of risk. AEye Inc is currently generating about 0.16 per unit of risk. If you would invest 15.00 in Innoviz Technologies on October 22, 2024 and sell it today you would earn a total of 4.00 from holding Innoviz Technologies or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.8% |
| Values | Daily Returns |
Innoviz Technologies vs. AEye Inc
Performance |
| Timeline |
| Innoviz Technologies |
| AEye Inc |
Innoviz Technologies and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innoviz Technologies and AEye
The main advantage of trading using opposite Innoviz Technologies and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, AEye 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 AEye will offset losses from the drop in AEye's long position.| Innoviz Technologies vs. Aeva Technologies, WT | Innoviz Technologies vs. Innoviz Technologies | Innoviz Technologies vs. EVgo Equity Warrants |
| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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