Correlation Between Innoviz Technologies and Holley

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

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

Diversification Opportunities for Innoviz Technologies and Holley

0.79

Correlation Coefficient

Innoviz Technologies  Holley

Poor diversification

The 3 months correlation between Innoviz and Holley is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Holley Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holley Inc and Innoviz 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 Innoviz Technologies are associated (or correlated) with Holley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holley Inc has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Holley go up and down completely randomly.

Pair Corralation between Innoviz Technologies and Holley

Given the investment horizon of 90 days Innoviz Technologies is expected to under-perform the Holley. In addition to that, Innoviz Technologies is 1.67 times more volatile than Holley Inc. It trades about -0.17 of its total potential returns per unit of risk. Holley Inc is currently generating about -0.02 per unit of volatility. If you would invest  301.00  in Holley Inc on December 28, 2024 and sell it today you would lose (34.00) from holding Holley Inc or give up 11.3% of portfolio value over 90 days.

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

Innoviz Technologies  vs.  Holley Inc

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.

Holley Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Holley Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Holley is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innoviz Technologies and Holley

The main advantage of trading using opposite Innoviz Technologies and Holley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innoviz Technologies position performs unexpectedly, Holley 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 Holley will offset losses from the drop in Holley's long position.

The idea behind Innoviz Technologies and Holley Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.