Correlation Between Joby Aviation and Archer Aviation

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

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

Diversification Opportunities for Joby Aviation and Archer Aviation

0.0

Correlation Coefficient

Joby Aviation  Archer Aviation

Pay attention - limited upside

The 3 months correlation between Joby and Archer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Archer Aviation WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Aviation WT and Joby Aviation 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 Joby Aviation are associated (or correlated) with Archer Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Aviation WT has no effect on the direction of Joby Aviation i.e., Joby Aviation and Archer Aviation go up and down completely randomly.

Pair Corralation between Joby Aviation and Archer Aviation

Assuming the 90 days trading horizon Joby Aviation is expected to generate 3.15 times more return on investment than Archer Aviation. However, Joby Aviation is 3.15 times more volatile than Archer Aviation WT. It trades about 0.19 of its potential returns per unit of risk. Archer Aviation WT is currently generating about -0.71 per unit of risk. If you would invest  65.00  in Joby Aviation on September 12, 2024 and sell it today you would earn a total of  142.00  from holding Joby Aviation or generate 218.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.17%
Values	Daily Returns

Joby Aviation  vs.  Archer Aviation WT

Joby Aviation

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Joby Aviation are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Joby Aviation unveiled solid returns over the last few months and may actually be approaching a breakup point.

Archer Aviation WT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archer Aviation WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Joby Aviation and Archer Aviation

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

The idea behind Joby Aviation and Archer Aviation WT 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.