Correlation Between Aehr Test and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Aehr Test and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Dow Jones.
Diversification Opportunities for Aehr Test and Dow Jones
Pay attention - limited upside
The 3 months correlation between Aehr and Dow is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Aehr Test i.e., Aehr Test and Dow Jones go up and down completely randomly.
Pair Corralation between Aehr Test and Dow Jones
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Dow Jones. In addition to that, Aehr Test is 7.63 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,382,669 in Dow Jones Industrial on November 8, 2024 and sell it today you would earn a total of 1,104,659 from holding Dow Jones Industrial or generate 32.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aehr Test Systems vs. Dow Jones Industrial
Performance |
| Timeline |
Aehr Test and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aehr Test Systems
Pair trading matchups for Aehr Test
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aehr Test and Dow Jones
The main advantage of trading using opposite Aehr Test and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Dow Jones vs. National Vision Holdings | Dow Jones vs. Grocery Outlet Holding | Dow Jones vs. Asbury Automotive Group | Dow Jones vs. Hanover Foods |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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