Correlation Between Aehr Test and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Aehr Test and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Tyson Foods.
Diversification Opportunities for Aehr Test and Tyson Foods
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aehr and Tyson is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Aehr Test i.e., Aehr Test and Tyson Foods go up and down completely randomly.
Pair Corralation between Aehr Test and Tyson Foods
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Tyson Foods. In addition to that, Aehr Test is 3.86 times more volatile than Tyson Foods. It trades about -0.03 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.08 per unit of volatility. If you would invest 4,986 in Tyson Foods on September 2, 2024 and sell it today you would earn a total of 1,464 from holding Tyson Foods or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Tyson Foods
Performance |
| Timeline |
| Aehr Test Systems |
| Tyson Foods |
Aehr Test and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Tyson Foods
The main advantage of trading using opposite Aehr Test and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Tyson Foods vs. Campbell Soup | Tyson Foods vs. ConAgra Foods | Tyson Foods vs. Hormel Foods | Tyson Foods vs. Kellanova |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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