Correlation Between Oceanpal and Joby Aviation

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

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

Diversification Opportunities for Oceanpal and Joby Aviation

0.88

Correlation Coefficient

Oceanpal  Joby Aviation

Very poor diversification

The 3 months correlation between Oceanpal and Joby is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and Joby Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joby Aviation and Oceanpal 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 Oceanpal 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 Oceanpal i.e., Oceanpal and Joby Aviation go up and down completely randomly.

Pair Corralation between Oceanpal and Joby Aviation

Allowing for the 90-day total investment horizon Oceanpal is expected to under-perform the Joby Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Oceanpal is 1.58 times less risky than Joby Aviation. The stock trades about -0.13 of its potential returns per unit of risk. The Joby Aviation is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  839.00  in Joby Aviation on December 28, 2024 and sell it today you would lose (182.00) from holding Joby Aviation or give up 21.69% of portfolio value over 90 days.

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

Oceanpal  vs.  Joby Aviation

Oceanpal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Oceanpal and Joby Aviation

The main advantage of trading using opposite Oceanpal and Joby Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal 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 Oceanpal 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.