Correlation Between Archer Aviation and AYR Strategies

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Can any of the company-specific risk be diversified away by investing in both Archer Aviation and AYR Strategies 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 AYR Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and AYR Strategies Class, you can compare the effects of market volatilities on Archer Aviation and AYR Strategies 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 AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and AYR Strategies.

Diversification Opportunities for Archer Aviation and AYR Strategies

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Archer and AYR is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class 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 AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of Archer Aviation i.e., Archer Aviation and AYR Strategies go up and down completely randomly.

Pair Corralation between Archer Aviation and AYR Strategies

Given the investment horizon of 90 days Archer Aviation is expected to under-perform the AYR Strategies. In addition to that, Archer Aviation is 1.02 times more volatile than AYR Strategies Class. It trades about 0.0 of its total potential returns per unit of risk. AYR Strategies Class is currently generating about 0.17 per unit of volatility. If you would invest  41.00  in AYR Strategies Class on October 22, 2024 and sell it today you would earn a total of  9.00  from holding AYR Strategies Class or generate 21.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Archer Aviation  vs.  AYR Strategies Class

 Performance 
       Timeline  
Archer Aviation 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Archer Aviation are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, Archer Aviation reported solid returns over the last few months and may actually be approaching a breakup point.
AYR Strategies Class 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AYR Strategies Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Archer Aviation and AYR Strategies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Archer Aviation and AYR Strategies

The main advantage of trading using opposite Archer Aviation and AYR Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, AYR Strategies 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 AYR Strategies will offset losses from the drop in AYR Strategies' long position.
The idea behind Archer Aviation and AYR Strategies Class 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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