Correlation Between MICT and AAR Corp
Can any of the company-specific risk be diversified away by investing in both MICT 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 MICT and AAR Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MICT Inc and AAR Corp, you can compare the effects of market volatilities on MICT 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 MICT with a short position of AAR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MICT and AAR Corp.
Diversification Opportunities for MICT and AAR Corp
Excellent diversification
The 3 months correlation between MICT and AAR is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MICT Inc and AAR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAR Corp and MICT 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 MICT Inc 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 MICT i.e., MICT and AAR Corp go up and down completely randomly.
Pair Corralation between MICT and AAR Corp
If you would invest 5,998 in AAR Corp on January 26, 2024 and sell it today you would earn a total of 795.00 from holding AAR Corp or generate 13.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
MICT Inc vs. AAR Corp
Performance |
Timeline |
MICT Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AAR Corp |
MICT and AAR Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MICT and AAR Corp
The main advantage of trading using opposite MICT and AAR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MICT 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.MICT vs. Ace Global Business | MICT vs. Amgen Inc | MICT vs. Electrovaya Common Shares | MICT vs. US Silica Holdings |
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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 the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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