Correlation Between Aehr Test and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Aehr Test and IPG Photonics 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 IPG Photonics 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 IPG Photonics, you can compare the effects of market volatilities on Aehr Test and IPG Photonics 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 IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and IPG Photonics.
Diversification Opportunities for Aehr Test and IPG Photonics
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aehr and IPG is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics 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 IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of Aehr Test i.e., Aehr Test and IPG Photonics go up and down completely randomly.
Pair Corralation between Aehr Test and IPG Photonics
Given the investment horizon of 90 days Aehr Test Systems is expected to generate 2.88 times more return on investment than IPG Photonics. However, Aehr Test is 2.88 times more volatile than IPG Photonics. It trades about 0.01 of its potential returns per unit of risk. IPG Photonics is currently generating about 0.0 per unit of risk. If you would invest 1,230 in Aehr Test Systems on November 1, 2024 and sell it today you would lose (148.00) from holding Aehr Test Systems or give up 12.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. IPG Photonics
Performance |
| Timeline |
| Aehr Test Systems |
| IPG Photonics |
Aehr Test and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and IPG Photonics
The main advantage of trading using opposite Aehr Test and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |