Correlation Between Lilium NV and Joby Aviation
Can any of the company-specific risk be diversified away by investing in both Lilium NV and Joby Aviation 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 Lilium NV and Joby Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lilium NV and Joby Aviation, you can compare the effects of market volatilities on Lilium NV and Joby Aviation 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 Lilium NV with a short position of Joby Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium NV and Joby Aviation.
Diversification Opportunities for Lilium NV and Joby Aviation
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lilium and Joby is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and Joby Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joby Aviation and Lilium NV 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 Lilium NV are associated (or correlated) with Joby Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joby Aviation has no effect on the direction of Lilium NV i.e., Lilium NV and Joby Aviation go up and down completely randomly.
Pair Corralation between Lilium NV and Joby Aviation
Given the investment horizon of 90 days Lilium NV is expected to under-perform the Joby Aviation. In addition to that, Lilium NV is 1.54 times more volatile than Joby Aviation. It trades about -0.06 of its total potential returns per unit of risk. Joby Aviation is currently generating about 0.2 per unit of volatility. If you would invest 55.00 in Joby Aviation on August 31, 2024 and sell it today you would earn a total of 135.00 from holding Joby Aviation or generate 245.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lilium NV vs. Joby Aviation
Performance |
| Timeline |
| Lilium NV |
| Joby Aviation |
Lilium NV and Joby Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium NV and Joby Aviation
The main advantage of trading using opposite Lilium NV and Joby Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium NV position performs unexpectedly, Joby Aviation 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 Joby Aviation will offset losses from the drop in Joby Aviation's long position.| Lilium NV vs. Vertical Aerospace | Lilium NV vs. Ehang Holdings | Lilium NV vs. Rocket Lab USA | Lilium NV vs. Archer Aviation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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