Correlation Between Archer Aviation and Puma SE
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Puma SE 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 Puma SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Puma SE, you can compare the effects of market volatilities on Archer Aviation and Puma SE 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 Puma SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Puma SE.
Diversification Opportunities for Archer Aviation and Puma SE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Archer and Puma is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Puma SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma SE 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 Puma SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma SE has no effect on the direction of Archer Aviation i.e., Archer Aviation and Puma SE go up and down completely randomly.
Pair Corralation between Archer Aviation and Puma SE
Given the investment horizon of 90 days Archer Aviation is expected to generate 1.35 times more return on investment than Puma SE. However, Archer Aviation is 1.35 times more volatile than Puma SE. It trades about 0.02 of its potential returns per unit of risk. Puma SE is currently generating about -0.02 per unit of risk. If you would invest 595.00 in Archer Aviation on August 24, 2024 and sell it today you would lose (17.00) from holding Archer Aviation or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.4% |
| Values | Daily Returns |
Archer Aviation vs. Puma SE
Performance |
| Timeline |
| Archer Aviation |
| Puma SE |
Archer Aviation and Puma SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Puma SE
The main advantage of trading using opposite Archer Aviation and Puma SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Puma SE 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 Puma SE will offset losses from the drop in Puma SE's long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Puma SE vs. Asics Corp ADR | Puma SE vs. Samsonite International SA | Puma SE vs. Adidas AG ADR | Puma SE vs. Wolverine World Wide |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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