Correlation Between Joby Aviation and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Joby Aviation and Innoviz 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 Joby Aviation and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joby Aviation and Innoviz Technologies, you can compare the effects of market volatilities on Joby Aviation and Innoviz 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 Joby Aviation with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joby Aviation and Innoviz Technologies.
Diversification Opportunities for Joby Aviation and Innoviz Technologies
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Joby and Innoviz is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Joby Aviation 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 Joby Aviation are associated (or correlated) with Innoviz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innoviz Technologies has no effect on the direction of Joby Aviation i.e., Joby Aviation and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Joby Aviation and Innoviz Technologies
Assuming the 90 days trading horizon Joby Aviation is expected to generate 7.45 times less return on investment than Innoviz Technologies. But when comparing it to its historical volatility, Joby Aviation is 10.8 times less risky than Innoviz Technologies. It trades about 0.2 of its potential returns per unit of risk. Innoviz Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Innoviz Technologies on August 28, 2024 and sell it today you would lose (2.50) from holding Innoviz Technologies or give up 22.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.54% |
| Values | Daily Returns |
Joby Aviation vs. Innoviz Technologies
Performance |
| Timeline |
| Joby Aviation |
| Innoviz Technologies |
Joby Aviation and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joby Aviation and Innoviz Technologies
The main advantage of trading using opposite Joby Aviation and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joby Aviation position performs unexpectedly, Innoviz 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 Innoviz Technologies will offset losses from the drop in Innoviz Technologies' long position.The idea behind Joby Aviation and Innoviz Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Innoviz Technologies vs. Ouster Inc | Innoviz Technologies vs. Aeva Technologies, WT | Innoviz Technologies vs. Innoviz Technologies | Innoviz Technologies vs. EVgo 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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