Correlation Between Ballistic Recovery and AAR Corp

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

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

Diversification Opportunities for Ballistic Recovery and AAR Corp

0.0

Correlation Coefficient

Ballistic Recovery  AAR Corp

Pay attention - limited upside

The 3 months correlation between Ballistic and AAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ballistic Recovery Systems and AAR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAR Corp and Ballistic Recovery 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 Ballistic Recovery Systems 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 Ballistic Recovery i.e., Ballistic Recovery and AAR Corp go up and down completely randomly.

Pair Corralation between Ballistic Recovery and AAR Corp

If you would invest  6,578  in AAR Corp on August 30, 2024 and sell it today you would earn a total of  324.00  from holding AAR Corp or generate 4.93% return on investment over 90 days.

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

Ballistic Recovery Systems  vs.  AAR Corp

Ballistic Recovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ballistic Recovery Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ballistic Recovery is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

AAR Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AAR Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward indicators, AAR Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Ballistic Recovery and AAR Corp

The main advantage of trading using opposite Ballistic Recovery and AAR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballistic Recovery 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.

The idea behind Ballistic Recovery Systems 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.