Correlation Between Blade Air and Innoviz Technologies

Can any of the company-specific risk be diversified away by investing in both Blade Air 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 Blade Air and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blade Air Mobility and Innoviz Technologies, you can compare the effects of market volatilities on Blade Air 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 Blade Air with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blade Air and Innoviz Technologies.

Diversification Opportunities for Blade Air and Innoviz Technologies

-0.18

Correlation Coefficient

Blade Air  Innoviz Technologies

Good diversification

The 3 months correlation between Blade and Innoviz is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Blade Air Mobility and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Blade Air 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 Blade Air Mobility 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 Blade Air i.e., Blade Air and Innoviz Technologies go up and down completely randomly.

Pair Corralation between Blade Air and Innoviz Technologies

Assuming the 90 days horizon Blade Air is expected to generate 7.93 times less return on investment than Innoviz Technologies. But when comparing it to its historical volatility, Blade Air Mobility is 5.2 times less risky than Innoviz Technologies. It trades about 0.05 of its potential returns per unit of risk. Innoviz Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Innoviz Technologies on September 19, 2024 and sell it today you would lose (118.00) from holding Innoviz Technologies or give up 85.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.29%
Values	Daily Returns

Blade Air Mobility  vs.  Innoviz Technologies

Blade Air Mobility

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blade Air Mobility are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Blade Air showed solid returns over the last few months and may actually be approaching a breakup point.

Innoviz Technologies

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Innoviz Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blade Air and Innoviz Technologies

The main advantage of trading using opposite Blade Air and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blade Air 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 Blade Air Mobility 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.