Correlation Between Innoviz Technologies and Gentex

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

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

Diversification Opportunities for Innoviz Technologies and Gentex

-0.6

Correlation Coefficient

Innoviz Technologies  Gentex

Excellent diversification

The 3 months correlation between Innoviz and Gentex is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Gentex go up and down completely randomly.

Pair Corralation between Innoviz Technologies and Gentex

Assuming the 90 days horizon Innoviz Technologies is expected to generate 63.22 times more return on investment than Gentex. However, Innoviz Technologies is 63.22 times more volatile than Gentex. It trades about 0.08 of its potential returns per unit of risk. Gentex is currently generating about -0.02 per unit of risk. If you would invest  56.00  in Innoviz Technologies on October 6, 2024 and sell it today you would lose (39.00) from holding Innoviz Technologies or give up 69.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.59%
Values	Daily Returns

Innoviz Technologies  vs.  Gentex

Innoviz Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Innoviz Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Innoviz Technologies and Gentex

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

The idea behind Innoviz Technologies and Gentex 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.