Correlation Between Luminar Technologies and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies 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 Luminar Technologies and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Innoviz Technologies, you can compare the effects of market volatilities on Luminar Technologies 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 Luminar Technologies with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Innoviz Technologies.
Diversification Opportunities for Luminar Technologies and Innoviz Technologies
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luminar and Innoviz is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Luminar 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 Luminar Technologies 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 Luminar Technologies i.e., Luminar Technologies and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Luminar Technologies and Innoviz Technologies
Given the investment horizon of 90 days Luminar Technologies is expected to generate 1.19 times more return on investment than Innoviz Technologies. However, Luminar Technologies is 1.19 times more volatile than Innoviz Technologies. It trades about -0.05 of its potential returns per unit of risk. Innoviz Technologies is currently generating about -0.07 per unit of risk. 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 |
Luminar Technologies vs. Innoviz Technologies
Performance |
| Timeline |
| Luminar Technologies |
| Innoviz Technologies |
Luminar Technologies and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Innoviz Technologies
The main advantage of trading using opposite Luminar Technologies and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies 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.| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
| Innoviz Technologies vs. Aeye Inc | Innoviz Technologies vs. Luminar Technologies | Innoviz Technologies vs. Hesai Group American | Innoviz Technologies vs. Mobileye Global Class |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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