Correlation Between Joby Aviation and Wheels Up

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

By analyzing existing cross correlation between Joby Aviation and Wheels Up Experience, you can compare the effects of market volatilities on Joby Aviation and Wheels Up 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 Wheels Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joby Aviation and Wheels Up.

Diversification Opportunities for Joby Aviation and Wheels Up

0.58

Correlation Coefficient

Joby Aviation  Wheels Up

Very weak diversification

The 3 months correlation between Joby and Wheels is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Wheels Up Experience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheels Up Experience 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 Wheels Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheels Up Experience has no effect on the direction of Joby Aviation i.e., Joby Aviation and Wheels Up go up and down completely randomly.

Pair Corralation between Joby Aviation and Wheels Up

Given the investment horizon of 90 days Joby Aviation is expected to generate 1.1 times more return on investment than Wheels Up. However, Joby Aviation is 1.1 times more volatile than Wheels Up Experience. It trades about 0.15 of its potential returns per unit of risk. Wheels Up Experience is currently generating about 0.13 per unit of risk. If you would invest  492.00  in Joby Aviation on September 3, 2024 and sell it today you would earn a total of  319.00  from holding Joby Aviation or generate 64.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Joby Aviation  vs.  Wheels Up Experience

Joby Aviation

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Joby Aviation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Joby Aviation showed solid returns over the last few months and may actually be approaching a breakup point.

Wheels Up Experience

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wheels Up Experience are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Wheels Up reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Joby Aviation and Wheels Up

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

The idea behind Joby Aviation and Wheels Up Experience 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.