Correlation Between Innoviz Technologies and Hyzon Motors

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

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

Diversification Opportunities for Innoviz Technologies and Hyzon Motors

-0.78

Correlation Coefficient

Innoviz Technologies  Hyzon Motors

Pay attention - limited upside

The 3 months correlation between Innoviz and Hyzon is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors 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 Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Hyzon Motors go up and down completely randomly.

Pair Corralation between Innoviz Technologies and Hyzon Motors

Given the investment horizon of 90 days Innoviz Technologies is expected to generate 1.52 times more return on investment than Hyzon Motors. However, Innoviz Technologies is 1.52 times more volatile than Hyzon Motors. It trades about 0.18 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.2 per unit of risk. If you would invest  75.00  in Innoviz Technologies on October 23, 2024 and sell it today you would earn a total of  87.00  from holding Innoviz Technologies or generate 116.0% return on investment over 90 days.

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

Innoviz Technologies  vs.  Hyzon Motors

Innoviz Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Innoviz Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Hyzon Motors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyzon Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Innoviz Technologies and Hyzon Motors

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

The idea behind Innoviz Technologies and Hyzon Motors 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.