Correlation Between Joby Aviation and Archer Aviation

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

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

Diversification Opportunities for Joby Aviation and Archer Aviation

0.62

Correlation Coefficient

Joby Aviation  Archer Aviation

Poor diversification

The 3 months correlation between Joby and Archer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Archer Aviation WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Aviation WT 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 Archer Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Aviation WT has no effect on the direction of Joby Aviation i.e., Joby Aviation and Archer Aviation go up and down completely randomly.

Pair Corralation between Joby Aviation and Archer Aviation

Assuming the 90 days trading horizon Joby Aviation is expected to under-perform the Archer Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Joby Aviation is 1.32 times less risky than Archer Aviation. The stock trades about -0.07 of its potential returns per unit of risk. The Archer Aviation WT is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  395.00  in Archer Aviation WT on December 27, 2024 and sell it today you would lose (146.00) from holding Archer Aviation WT or give up 36.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Joby Aviation  vs.  Archer Aviation WT

Joby Aviation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Joby Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Archer Aviation WT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Archer Aviation WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Joby Aviation and Archer Aviation

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

The idea behind Joby Aviation and Archer Aviation WT 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.