Correlation Between Aehr Test and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Compania Cervecerias 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 Compania Cervecerias 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 Compania Cervecerias Unidas, you can compare the effects of market volatilities on Aehr Test and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Compania Cervecerias.
Diversification Opportunities for Aehr Test and Compania Cervecerias
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aehr and Compania is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Aehr Test i.e., Aehr Test and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Aehr Test and Compania Cervecerias
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Compania Cervecerias. In addition to that, Aehr Test is 2.87 times more volatile than Compania Cervecerias Unidas. It trades about -0.16 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.17 per unit of volatility. If you would invest 1,085 in Compania Cervecerias Unidas on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Compania Cervecerias Unidas or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Aehr Test Systems |
| Compania Cervecerias |
Aehr Test and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Compania Cervecerias
The main advantage of trading using opposite Aehr Test and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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