Correlation Between Continental Aktiengesellscha and Innoviz Technologies

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

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

Diversification Opportunities for Continental Aktiengesellscha and Innoviz Technologies

-0.65

Correlation Coefficient

Continental Aktiengesellscha  Innoviz Technologies

Excellent diversification

The 3 months correlation between Continental and Innoviz is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Continental Aktiengesellscha 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 Continental Aktiengesellschaft 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 Continental Aktiengesellscha i.e., Continental Aktiengesellscha and Innoviz Technologies go up and down completely randomly.

Pair Corralation between Continental Aktiengesellscha and Innoviz Technologies

Assuming the 90 days horizon Continental Aktiengesellschaft is expected to generate 0.45 times more return on investment than Innoviz Technologies. However, Continental Aktiengesellschaft is 2.21 times less risky than Innoviz Technologies. It trades about 0.07 of its potential returns per unit of risk. Innoviz Technologies is currently generating about -0.14 per unit of risk. If you would invest  6,600  in Continental Aktiengesellschaft on December 24, 2024 and sell it today you would earn a total of  830.00  from holding Continental Aktiengesellschaft or generate 12.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Continental Aktiengesellschaft  vs.  Innoviz Technologies

Continental Aktiengesellscha

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Continental Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Innoviz Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innoviz Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Continental Aktiengesellscha and Innoviz Technologies

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

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.