Correlation Between Aehr Test and Applied Opt
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Applied Opt 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 Aehr Test and Applied Opt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aehr Test Systems and Applied Opt, you can compare the effects of market volatilities on Aehr Test and Applied Opt 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 Aehr Test with a short position of Applied Opt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Applied Opt.
Diversification Opportunities for Aehr Test and Applied Opt
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aehr and Applied is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Applied Opt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Opt and Aehr Test 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 Aehr Test Systems are associated (or correlated) with Applied Opt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Opt has no effect on the direction of Aehr Test i.e., Aehr Test and Applied Opt go up and down completely randomly.
Pair Corralation between Aehr Test and Applied Opt
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Applied Opt. But the stock apears to be less risky and, when comparing its historical volatility, Aehr Test Systems is 1.63 times less risky than Applied Opt. The stock trades about -0.04 of its potential returns per unit of risk. The Applied Opt is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 703.00 in Applied Opt on August 28, 2024 and sell it today you would earn a total of 3,088 from holding Applied Opt or generate 439.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Applied Opt
Performance |
| Timeline |
| Aehr Test Systems |
| Applied Opt |
Aehr Test and Applied Opt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Applied Opt
The main advantage of trading using opposite Aehr Test and Applied Opt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Applied Opt 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 Applied Opt will offset losses from the drop in Applied Opt's long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group | Applied Opt vs. Ultra Clean Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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