Correlation Between AST SpaceMobile and Innoviz Technologies

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

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

Diversification Opportunities for AST SpaceMobile and Innoviz Technologies

-0.45

Correlation Coefficient

AST SpaceMobile  Innoviz Technologies

Very good diversification

The 3 months correlation between AST and Innoviz is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and AST SpaceMobile 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 AST SpaceMobile 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 AST SpaceMobile i.e., AST SpaceMobile and Innoviz Technologies go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Innoviz Technologies

If you would invest  7.90  in Innoviz Technologies on September 4, 2024 and sell it today you would earn a total of  0.60  from holding Innoviz Technologies or generate 7.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

AST SpaceMobile  vs.  Innoviz Technologies

AST SpaceMobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AST SpaceMobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Innoviz Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 11 (%) 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.

Pair Trading with AST SpaceMobile and Innoviz Technologies

The main advantage of trading using opposite AST SpaceMobile and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AST SpaceMobile 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 AST SpaceMobile 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.