Correlation Between Archer Aviation and Wheels Up

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

By analyzing existing cross correlation between Archer Aviation and Wheels Up Experience, you can compare the effects of market volatilities on Archer Aviation and Wheels Up 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 Wheels Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Aviation and Wheels Up.

Diversification Opportunities for Archer Aviation and Wheels Up

0.1

Correlation Coefficient

Archer Aviation  Wheels Up

Average diversification

The 3 months correlation between Archer and Wheels is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Archer Aviation and Wheels Up Experience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheels Up Experience 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 Wheels Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheels Up Experience has no effect on the direction of Archer Aviation i.e., Archer Aviation and Wheels Up go up and down completely randomly.

Pair Corralation between Archer Aviation and Wheels Up

Given the investment horizon of 90 days Archer Aviation is expected to generate 0.61 times more return on investment than Wheels Up. However, Archer Aviation is 1.64 times less risky than Wheels Up. It trades about 0.07 of its potential returns per unit of risk. Wheels Up Experience is currently generating about 0.01 per unit of risk. If you would invest  275.00  in Archer Aviation on September 19, 2024 and sell it today you would earn a total of  634.00  from holding Archer Aviation or generate 230.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Archer Aviation  vs.  Wheels Up Experience

Archer Aviation

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Aviation are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, Archer Aviation reported solid returns over the last few months and may actually be approaching a breakup point.

Wheels Up Experience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheels Up Experience has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Archer Aviation and Wheels Up

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

The idea behind Archer Aviation and Wheels Up Experience 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.