Correlation Between Innoviz Technologies and Blade Air

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

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

Diversification Opportunities for Innoviz Technologies and Blade Air

-0.37

Correlation Coefficient

Innoviz Technologies  Blade Air

Very good diversification

The 3 months correlation between Innoviz and Blade is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Innoviz Technologies and Blade Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blade Air Mobility 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 Blade Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blade Air Mobility has no effect on the direction of Innoviz Technologies i.e., Innoviz Technologies and Blade Air go up and down completely randomly.

Pair Corralation between Innoviz Technologies and Blade Air

Assuming the 90 days horizon Innoviz Technologies is expected to generate 5.79 times more return on investment than Blade Air. However, Innoviz Technologies is 5.79 times more volatile than Blade Air Mobility. It trades about 0.09 of its potential returns per unit of risk. Blade Air Mobility is currently generating about 0.07 per unit of risk. If you would invest  49.00  in Innoviz Technologies on August 31, 2024 and sell it today you would lose (39.45) from holding Innoviz Technologies or give up 80.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.13%
Values	Daily Returns

Innoviz Technologies  vs.  Blade Air Mobility

Innoviz Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innoviz Technologies are ranked lower than 12 (%) 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.

Blade Air Mobility

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blade Air Mobility are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Blade Air showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Innoviz Technologies and Blade Air

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

The idea behind Innoviz Technologies and Blade Air Mobility 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 Stocks Directory module to find actively traded stocks across global markets.