Correlation Between Intel Corp and AAR Corp

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Can any of the company-specific risk be diversified away by investing in both Intel Corp and AAR Corp 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 Intel Corp and AAR Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel Corp and AAR Corp, you can compare the effects of market volatilities on Intel Corp and AAR Corp 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 Intel Corp with a short position of AAR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel Corp and AAR Corp.

Diversification Opportunities for Intel Corp and AAR Corp

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Intel and AAR Corp is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and AAR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAR Corp and Intel Corp 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 Intel Corp are associated (or correlated) with AAR Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAR Corp has no effect on the direction of Intel Corp i.e., Intel Corp and AAR Corp go up and down completely randomly.

Pair Corralation between Intel Corp and AAR Corp

Given the investment horizon of 90 days Intel Corp is expected to under-perform the AAR Corp. In addition to that, Intel Corp is 1.0 times more volatile than AAR Corp. It trades about -0.21 of its total potential returns per unit of risk. AAR Corp is currently generating about -0.12 per unit of volatility. If you would invest  4,186  in AAR Corp on June 28, 2022 and sell it today you would lose (683.00)  from holding AAR Corp or give up 16.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Intel Corp  vs.  AAR Corp

 Performance (%) 
       Timeline  
Intel Corp 
Intel Performance
0 of 100
Over the last 90 days Intel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Intel Price Channel

AAR Corp 
AAR Corp Performance
0 of 100
Over the last 90 days AAR Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

AAR Corp Price Channel

Intel Corp and AAR Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel Corp and AAR Corp

The main advantage of trading using opposite Intel Corp and AAR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel Corp position performs unexpectedly, AAR Corp 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 AAR Corp will offset losses from the drop in AAR Corp's long position.
Intel Corp vs. Kibush Capital Corp
The idea behind Intel Corp and AAR Corp 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.
AAR Corp vs. Kibush Capital Corp
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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