Correlation Between Joby Aviation and American Aires
Can any of the company-specific risk be diversified away by investing in both Joby Aviation and American Aires 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 Joby Aviation and American Aires into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joby Aviation and American Aires, you can compare the effects of market volatilities on Joby Aviation and American Aires 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 Joby Aviation with a short position of American Aires. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joby Aviation and American Aires.
Diversification Opportunities for Joby Aviation and American Aires
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Joby and American is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and American Aires in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Aires and Joby 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 Joby Aviation are associated (or correlated) with American Aires. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Aires has no effect on the direction of Joby Aviation i.e., Joby Aviation and American Aires go up and down completely randomly.
Pair Corralation between Joby Aviation and American Aires
Given the investment horizon of 90 days Joby Aviation is expected to under-perform the American Aires. But the stock apears to be less risky and, when comparing its historical volatility, Joby Aviation is 1.6 times less risky than American Aires. The stock trades about -0.17 of its potential returns per unit of risk. The American Aires is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in American Aires on November 5, 2024 and sell it today you would earn a total of 0.00 from holding American Aires or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Joby Aviation vs. American Aires
Performance |
| Timeline |
| Joby Aviation |
| American Aires |
Joby Aviation and American Aires Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joby Aviation and American Aires
The main advantage of trading using opposite Joby Aviation and American Aires positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joby Aviation position performs unexpectedly, American Aires 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 American Aires will offset losses from the drop in American Aires' long position.| Joby Aviation vs. Archer Aviation | Joby Aviation vs. Lilium NV | Joby Aviation vs. Blade Air Mobility | Joby Aviation vs. Rocket Lab USA |
| American Aires vs. alpha En | American Aires vs. Alps Electric Co | American Aires vs. Bitmine Immersion Technologies | American Aires vs. AT S Austria |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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