Correlation Between Aehr Test and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Coupang LLC 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 Coupang LLC 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 Coupang LLC, you can compare the effects of market volatilities on Aehr Test and Coupang LLC 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 Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Coupang LLC.
Diversification Opportunities for Aehr Test and Coupang LLC
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aehr and Coupang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Aehr Test i.e., Aehr Test and Coupang LLC go up and down completely randomly.
Pair Corralation between Aehr Test and Coupang LLC
Given the investment horizon of 90 days Aehr Test is expected to generate 3.72 times less return on investment than Coupang LLC. In addition to that, Aehr Test is 2.22 times more volatile than Coupang LLC. It trades about 0.01 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.04 per unit of volatility. If you would invest 1,729 in Coupang LLC on September 4, 2024 and sell it today you would earn a total of 756.00 from holding Coupang LLC or generate 43.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Coupang LLC
Performance |
| Timeline |
| Aehr Test Systems |
| Coupang LLC |
Aehr Test and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Coupang LLC
The main advantage of trading using opposite Aehr Test and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Coupang LLC vs. PDD Holdings | Coupang LLC vs. Alibaba Group Holding | Coupang LLC vs. Global E Online | Coupang LLC vs. Sea |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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