Correlation Between Xos Equity and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Xos Equity 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 Xos Equity and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Equity Warrants and Innoviz Technologies, you can compare the effects of market volatilities on Xos Equity 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 Xos Equity with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and Innoviz Technologies.
Diversification Opportunities for Xos Equity and Innoviz Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xos and Innoviz is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Xos Equity 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 Xos Equity Warrants 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 Xos Equity i.e., Xos Equity and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Xos Equity and Innoviz Technologies
Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Innoviz Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Xos Equity Warrants is 1.51 times less risky than Innoviz Technologies. The stock trades about -0.29 of its potential returns per unit of risk. The Innoviz Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4.88 in Innoviz Technologies on September 1, 2024 and sell it today you would earn a total of 4.67 from holding Innoviz Technologies or generate 95.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xos Equity Warrants vs. Innoviz Technologies
Performance |
| Timeline |
| Xos Equity Warrants |
| Innoviz Technologies |
Xos Equity and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos Equity and Innoviz Technologies
The main advantage of trading using opposite Xos Equity and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity 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.| Xos Equity vs. Ford Motor | Xos Equity vs. General Motors | Xos Equity vs. Goodyear Tire Rubber | Xos Equity vs. Li Auto |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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