Correlation Between Archer Aviation and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Curtiss Wright 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 Curtiss Wright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Curtiss Wright, you can compare the effects of market volatilities on Archer Aviation and Curtiss Wright 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 Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Curtiss Wright.
Diversification Opportunities for Archer Aviation and Curtiss Wright
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Archer and Curtiss is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright 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 Curtiss Wright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Wright has no effect on the direction of Archer Aviation i.e., Archer Aviation and Curtiss Wright go up and down completely randomly.
Pair Corralation between Archer Aviation and Curtiss Wright
Given the investment horizon of 90 days Archer Aviation is expected to generate 4.05 times more return on investment than Curtiss Wright. However, Archer Aviation is 4.05 times more volatile than Curtiss Wright. It trades about 0.67 of its potential returns per unit of risk. Curtiss Wright is currently generating about 0.19 per unit of risk. If you would invest 315.00 in Archer Aviation on September 1, 2024 and sell it today you would earn a total of 642.00 from holding Archer Aviation or generate 203.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Aviation vs. Curtiss Wright
Performance |
| Timeline |
| Archer Aviation |
| Curtiss Wright |
Archer Aviation and Curtiss Wright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Curtiss Wright
The main advantage of trading using opposite Archer Aviation and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Curtiss Wright 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 Curtiss Wright will offset losses from the drop in Curtiss Wright's long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Curtiss Wright vs. Archer Aviation | Curtiss Wright vs. Rocket Lab USA | Curtiss Wright vs. Lilium NV | Curtiss Wright vs. HEICO |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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