Correlation Between Archer Aviation and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Hong Kong 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 Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Hong Kong and, you can compare the effects of market volatilities on Archer Aviation and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Hong Kong.
Diversification Opportunities for Archer Aviation and Hong Kong
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Archer and Hong is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Hong Kong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong has no effect on the direction of Archer Aviation i.e., Archer Aviation and Hong Kong go up and down completely randomly.
Pair Corralation between Archer Aviation and Hong Kong
Given the investment horizon of 90 days Archer Aviation is expected to generate 1.77 times more return on investment than Hong Kong. However, Archer Aviation is 1.77 times more volatile than Hong Kong and. It trades about 0.55 of its potential returns per unit of risk. Hong Kong and is currently generating about -0.05 per unit of risk. If you would invest 328.00 in Archer Aviation on August 31, 2024 and sell it today you would earn a total of 480.00 from holding Archer Aviation or generate 146.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Aviation vs. Hong Kong and
Performance |
| Timeline |
| Archer Aviation |
| Hong Kong |
Archer Aviation and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Hong Kong
The main advantage of trading using opposite Archer Aviation and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Hong Kong vs. Henderson Land Development | Hong Kong vs. CLP Holdings | Hong Kong vs. Power Assets Holdings | Hong Kong vs. Hang Lung Properties |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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