Correlation Between Aehr Test and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Aehr Test and KLA Tencor 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 KLA Tencor 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 KLA Tencor, you can compare the effects of market volatilities on Aehr Test and KLA Tencor 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 KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and KLA Tencor.
Diversification Opportunities for Aehr Test and KLA Tencor
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aehr and KLA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Aehr Test i.e., Aehr Test and KLA Tencor go up and down completely randomly.
Pair Corralation between Aehr Test and KLA Tencor
Given the investment horizon of 90 days Aehr Test Systems is expected to generate 2.53 times more return on investment than KLA Tencor. However, Aehr Test is 2.53 times more volatile than KLA Tencor. It trades about 0.01 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.01 per unit of risk. If you would invest 1,226 in Aehr Test Systems on October 31, 2024 and sell it today you would lose (144.00) from holding Aehr Test Systems or give up 11.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aehr Test Systems vs. KLA Tencor
Performance |
Timeline |
Aehr Test Systems |
KLA Tencor |
Aehr Test and KLA Tencor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aehr Test and KLA Tencor
The main advantage of trading using opposite Aehr Test and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, KLA Tencor 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 KLA Tencor will offset losses from the drop in KLA Tencor's long position.Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
KLA Tencor vs. Diodes Incorporated | KLA Tencor vs. Daqo New Energy | KLA Tencor vs. Micron Technology | KLA Tencor vs. MagnaChip Semiconductor |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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