Correlation Between Volato and Joby Aviation
Can any of the company-specific risk be diversified away by investing in both Volato 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 Volato and Joby Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volato Group and Joby Aviation, you can compare the effects of market volatilities on Volato 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 Volato with a short position of Joby Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volato and Joby Aviation.
Diversification Opportunities for Volato and Joby Aviation
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volato and Joby is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Volato Group and Joby Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joby Aviation and Volato 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 Volato Group 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 Volato i.e., Volato and Joby Aviation go up and down completely randomly.
Pair Corralation between Volato and Joby Aviation
Given the investment horizon of 90 days Volato Group is expected to generate 4.06 times more return on investment than Joby Aviation. However, Volato is 4.06 times more volatile than Joby Aviation. It trades about 0.1 of its potential returns per unit of risk. Joby Aviation is currently generating about 0.09 per unit of risk. If you would invest 28.00 in Volato Group on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Volato Group or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volato Group vs. Joby Aviation
Performance |
| Timeline |
| Volato Group |
| Joby Aviation |
Volato and Joby Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volato and Joby Aviation
The main advantage of trading using opposite Volato and Joby Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volato 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.The idea behind Volato Group and Joby Aviation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Joby Aviation vs. Archer Aviation | Joby Aviation vs. Lilium NV | Joby Aviation vs. Blade Air Mobility | Joby Aviation 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |