Correlation Between Archer Aviation and Innoviz Technologies
Can any of the company-specific risk be diversified away by investing in both Archer Aviation 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 Archer Aviation and Innoviz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation WT and Innoviz Technologies, you can compare the effects of market volatilities on Archer Aviation 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 Archer Aviation with a short position of Innoviz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Innoviz Technologies.
Diversification Opportunities for Archer Aviation and Innoviz Technologies
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Archer and Innoviz is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation WT and Innoviz Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innoviz Technologies and Archer 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 Archer Aviation WT 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 Archer Aviation i.e., Archer Aviation and Innoviz Technologies go up and down completely randomly.
Pair Corralation between Archer Aviation and Innoviz Technologies
Assuming the 90 days trading horizon Archer Aviation is expected to generate 4.53 times less return on investment than Innoviz Technologies. But when comparing it to its historical volatility, Archer Aviation WT is 6.29 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 110.00 in Innoviz Technologies on November 1, 2024 and sell it today you would lose (97.00) from holding Innoviz Technologies or give up 88.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 7.64% |
| Values | Daily Returns |
Archer Aviation WT vs. Innoviz Technologies
Performance |
| Timeline |
| Archer Aviation WT |
| Innoviz Technologies |
Archer Aviation and Innoviz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Innoviz Technologies
The main advantage of trading using opposite Archer Aviation and Innoviz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation 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.| Archer Aviation vs. Joby Aviation | Archer Aviation vs. BKSY WT | Archer Aviation vs. Blade Air Mobility | Archer Aviation vs. AEye Inc |
| Innoviz Technologies vs. Aeva Technologies, WT | Innoviz Technologies vs. Innoviz Technologies | Innoviz Technologies vs. EVgo Equity Warrants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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