Correlation Between Archer Aviation and Chocoladefabriken

Can any of the company-specific risk be diversified away by investing in both Archer Aviation and Chocoladefabriken 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 Archer Aviation and Chocoladefabriken into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Archer Aviation and Chocoladefabriken Lindt Sprngli, you can compare the effects of market volatilities on Archer Aviation and Chocoladefabriken 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 Archer Aviation with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Chocoladefabriken.

Diversification Opportunities for Archer Aviation and Chocoladefabriken

-0.66

Correlation Coefficient

Archer Aviation  Chocoladefabriken

Excellent diversification

The 3 months correlation between Archer and Chocoladefabriken is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Archer 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 Archer Aviation are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Archer Aviation i.e., Archer Aviation and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Archer Aviation and Chocoladefabriken

Given the investment horizon of 90 days Archer Aviation is expected to under-perform the Chocoladefabriken. In addition to that, Archer Aviation is 2.24 times more volatile than Chocoladefabriken Lindt Sprngli. It trades about -0.01 of its total potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about 0.13 per unit of volatility. If you would invest  1,126  in Chocoladefabriken Lindt Sprngli on December 24, 2024 and sell it today you would earn a total of  236.00  from holding Chocoladefabriken Lindt Sprngli or generate 20.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Archer Aviation  vs.  Chocoladefabriken Lindt Sprngl

Archer Aviation

Risk-Adjusted Performance

Weak

Over the last 90 days Archer Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Archer Aviation is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Sprngli are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chocoladefabriken showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Archer Aviation and Chocoladefabriken

The main advantage of trading using opposite Archer Aviation and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Aviation position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.

The idea behind Archer Aviation and Chocoladefabriken Lindt Sprngli 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.