Correlation Between Rigetti Computing and Innoviz Technologies

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

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

Diversification Opportunities for Rigetti Computing and Innoviz Technologies

0.26

Correlation Coefficient

Rigetti Computing  Innoviz Technologies

Modest diversification

The 3 months correlation between Rigetti and Innoviz is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Rigetti Computing and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Rigetti Computing 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 Rigetti Computing 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 Rigetti Computing i.e., Rigetti Computing and Innoviz Technologies go up and down completely randomly.

Pair Corralation between Rigetti Computing and Innoviz Technologies

Given the investment horizon of 90 days Rigetti Computing is expected to generate 5.62 times less return on investment than Innoviz Technologies. But when comparing it to its historical volatility, Rigetti Computing is 7.58 times less risky than Innoviz Technologies. It trades about 0.1 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  143.00  in Innoviz Technologies on September 23, 2024 and sell it today you would lose (123.00) from holding Innoviz Technologies or give up 86.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.96%
Values	Daily Returns

Rigetti Computing  vs.  Innoviz Technologies

Rigetti Computing

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Innoviz Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 10 (%) 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 Rigetti Computing and Innoviz Technologies

The main advantage of trading using opposite Rigetti Computing and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigetti Computing 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 Rigetti Computing 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.