Correlation Between Archer Aviation and Wheat Futures
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Wheat Futures 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 Wheat Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Wheat Futures, you can compare the effects of market volatilities on Archer Aviation and Wheat Futures 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 Wheat Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Wheat Futures.
Diversification Opportunities for Archer Aviation and Wheat Futures
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Archer and Wheat is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Wheat Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheat Futures 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 Wheat Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheat Futures has no effect on the direction of Archer Aviation i.e., Archer Aviation and Wheat Futures go up and down completely randomly.
Pair Corralation between Archer Aviation and Wheat Futures
Given the investment horizon of 90 days Archer Aviation is expected to generate 2.87 times more return on investment than Wheat Futures. However, Archer Aviation is 2.87 times more volatile than Wheat Futures. It trades about 0.07 of its potential returns per unit of risk. Wheat Futures is currently generating about -0.04 per unit of risk. If you would invest 215.00 in Archer Aviation on August 29, 2024 and sell it today you would earn a total of 507.00 from holding Archer Aviation or generate 235.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.61% |
| Values | Daily Returns |
Archer Aviation vs. Wheat Futures
Performance |
| Timeline |
| Archer Aviation |
| Wheat Futures |
Archer Aviation and Wheat Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Wheat Futures
The main advantage of trading using opposite Archer Aviation and Wheat Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Wheat Futures 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 Wheat Futures will offset losses from the drop in Wheat Futures' long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Wheat Futures vs. Nasdaq 100 | Wheat Futures vs. Oat Futures | Wheat Futures vs. Feeder Cattle Futures | Wheat Futures vs. Micro Silver Futures |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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