Correlation Between Ehang Holdings and AAR Corp
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings and AAR Corp 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 Ehang Holdings and AAR Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and AAR Corp, you can compare the effects of market volatilities on Ehang Holdings and AAR Corp 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 Ehang Holdings with a short position of AAR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and AAR Corp.
Diversification Opportunities for Ehang Holdings and AAR Corp
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ehang and AAR is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and AAR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAR Corp and Ehang Holdings 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 Ehang Holdings are associated (or correlated) with AAR Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAR Corp has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and AAR Corp go up and down completely randomly.
Pair Corralation between Ehang Holdings and AAR Corp
Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 2.78 times less return on investment than AAR Corp. In addition to that, Ehang Holdings is 1.75 times more volatile than AAR Corp. It trades about 0.03 of its total potential returns per unit of risk. AAR Corp is currently generating about 0.12 per unit of volatility. If you would invest 5,840 in AAR Corp on November 1, 2024 and sell it today you would earn a total of 1,044 from holding AAR Corp or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ehang Holdings vs. AAR Corp
Performance |
| Timeline |
| Ehang Holdings |
| AAR Corp |
Ehang Holdings and AAR Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and AAR Corp
The main advantage of trading using opposite Ehang Holdings and AAR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings position performs unexpectedly, AAR Corp 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 AAR Corp will offset losses from the drop in AAR Corp's long position.| Ehang Holdings vs. Archer Aviation | Ehang Holdings vs. Vertical Aerospace | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Lilium NV |
| AAR Corp vs. Sidus Space | AAR Corp vs. Planet Labs PBC | AAR Corp vs. Intuitive Machines | AAR Corp vs. Rocket Lab USA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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