Correlation Between Archer Aviation and L3Harris Technologies
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and L3Harris Technologies 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 L3Harris Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and L3Harris Technologies, you can compare the effects of market volatilities on Archer Aviation and L3Harris Technologies 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 L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and L3Harris Technologies.
Diversification Opportunities for Archer Aviation and L3Harris Technologies
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Archer and L3Harris is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies 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 L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Archer Aviation i.e., Archer Aviation and L3Harris Technologies go up and down completely randomly.
Pair Corralation between Archer Aviation and L3Harris Technologies
Given the investment horizon of 90 days Archer Aviation is expected to generate 4.85 times more return on investment than L3Harris Technologies. However, Archer Aviation is 4.85 times more volatile than L3Harris Technologies. It trades about 0.46 of its potential returns per unit of risk. L3Harris Technologies is currently generating about -0.01 per unit of risk. If you would invest 341.00 in Archer Aviation on August 28, 2024 and sell it today you would earn a total of 381.00 from holding Archer Aviation or generate 111.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Aviation vs. L3Harris Technologies
Performance |
| Timeline |
| Archer Aviation |
| L3Harris Technologies |
Archer Aviation and L3Harris Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and L3Harris Technologies
The main advantage of trading using opposite Archer Aviation and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| L3Harris Technologies vs. Lockheed Martin | L3Harris Technologies vs. General Dynamics | L3Harris Technologies vs. Raytheon Technologies Corp | L3Harris Technologies vs. Huntington Ingalls Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |