Correlation Between Aeluma and Archer Materials
Can any of the company-specific risk be diversified away by investing in both Aeluma and Archer Materials 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 Aeluma and Archer Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeluma Inc and Archer Materials Limited, you can compare the effects of market volatilities on Aeluma and Archer Materials 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 Aeluma with a short position of Archer Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeluma and Archer Materials.
Diversification Opportunities for Aeluma and Archer Materials
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aeluma and Archer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aeluma Inc and Archer Materials Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Materials and Aeluma 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 Aeluma Inc are associated (or correlated) with Archer Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Materials has no effect on the direction of Aeluma i.e., Aeluma and Archer Materials go up and down completely randomly.
Pair Corralation between Aeluma and Archer Materials
Given the investment horizon of 90 days Aeluma is expected to generate 1.36 times less return on investment than Archer Materials. But when comparing it to its historical volatility, Aeluma Inc is 1.59 times less risky than Archer Materials. It trades about 0.17 of its potential returns per unit of risk. Archer Materials Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Archer Materials Limited on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Archer Materials Limited or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aeluma Inc vs. Archer Materials Limited
Performance |
| Timeline |
| Aeluma Inc |
| Archer Materials |
Aeluma and Archer Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeluma and Archer Materials
The main advantage of trading using opposite Aeluma and Archer Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeluma position performs unexpectedly, Archer Materials 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 Archer Materials will offset losses from the drop in Archer Materials' long position.| Aeluma vs. Archer Materials Limited | Aeluma vs. Alphawave IP Group | Aeluma vs. BrainChip Holdings | Aeluma vs. Arteris |
| Archer Materials vs. Aeluma Inc | Archer Materials vs. Alphawave IP Group | Archer Materials vs. BrainChip Holdings | Archer Materials vs. Arteris |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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