Correlation Between Archer Aviation and Tat Techno
Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Tat Techno 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 Tat Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Aviation and Tat Techno, you can compare the effects of market volatilities on Archer Aviation and Tat Techno 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 Tat Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Tat Techno.
Diversification Opportunities for Archer Aviation and Tat Techno
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Archer and Tat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Tat Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tat Techno 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 Tat Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tat Techno has no effect on the direction of Archer Aviation i.e., Archer Aviation and Tat Techno go up and down completely randomly.
Pair Corralation between Archer Aviation and Tat Techno
Given the investment horizon of 90 days Archer Aviation is expected to generate 1.96 times more return on investment than Tat Techno. However, Archer Aviation is 1.96 times more volatile than Tat Techno. It trades about 0.08 of its potential returns per unit of risk. Tat Techno is currently generating about 0.13 per unit of risk. If you would invest 306.00 in Archer Aviation on August 31, 2024 and sell it today you would earn a total of 651.00 from holding Archer Aviation or generate 212.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Aviation vs. Tat Techno
Performance |
| Timeline |
| Archer Aviation |
| Tat Techno |
Archer Aviation and Tat Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Aviation and Tat Techno
The main advantage of trading using opposite Archer Aviation and Tat Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Tat Techno 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 Tat Techno will offset losses from the drop in Tat Techno's long position.| Archer Aviation vs. Vertical Aerospace | Archer Aviation vs. Ehang Holdings | Archer Aviation vs. Rocket Lab USA | Archer Aviation vs. Lilium NV |
| Tat Techno vs. Lilium NV | Tat Techno vs. Archer Aviation | Tat Techno vs. Ehang Holdings | Tat Techno vs. Vertical Aerospace |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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