Correlation Between Archer Aviation and Acciona SA
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Acciona SA 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 Acciona SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Acciona SA, you can compare the effects of market volatilities on Archer Aviation and Acciona SA 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 Acciona SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Acciona SA.
Diversification Opportunities for Archer Aviation and Acciona SA
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Archer and Acciona is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA 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 are associated (or correlated) with Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of Archer Aviation i.e., Archer Aviation and Acciona SA go up and down completely randomly.
Pair Corralation between Archer Aviation and Acciona SA
Given the investment horizon of 90 days Archer Aviation is expected to under-perform the Acciona SA. In addition to that, Archer Aviation is 4.41 times more volatile than Acciona SA. It trades about -0.04 of its total potential returns per unit of risk. Acciona SA is currently generating about -0.08 per unit of volatility. If you would invest 11,486 in Acciona SA on October 26, 2024 and sell it today you would lose (318.00) from holding Acciona SA or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Archer Aviation vs. Acciona SA
Performance |
| Timeline |
| Archer Aviation |
| Acciona SA |
Archer Aviation and Acciona SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Acciona SA
The main advantage of trading using opposite Archer Aviation and Acciona SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Acciona SA 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 Acciona SA will offset losses from the drop in Acciona SA's long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Acciona SA vs. JGC Corp | Acciona SA vs. ACS Actividades de | Acciona SA vs. Kajima Corp ADR | Acciona SA vs. ACS Actividades De |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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