Correlation Between Aehr Test and Veeco Instruments
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments, you can compare the effects of market volatilities on Aehr Test and Veeco Instruments 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 Veeco Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Veeco Instruments.
Diversification Opportunities for Aehr Test and Veeco Instruments
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aehr and Veeco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Veeco Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeco Instruments 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 Veeco Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeco Instruments has no effect on the direction of Aehr Test i.e., Aehr Test and Veeco Instruments go up and down completely randomly.
Pair Corralation between Aehr Test and Veeco Instruments
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Veeco Instruments. In addition to that, Aehr Test is 1.19 times more volatile than Veeco Instruments. It trades about -0.21 of its total potential returns per unit of risk. Veeco Instruments is currently generating about -0.17 per unit of volatility. If you would invest 2,741 in Veeco Instruments on November 18, 2024 and sell it today you would lose (274.00) from holding Veeco Instruments or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Veeco Instruments
Performance |
| Timeline |
| Aehr Test Systems |
| Veeco Instruments |
Aehr Test and Veeco Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Veeco Instruments
The main advantage of trading using opposite Aehr Test and Veeco Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Veeco Instruments 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 Veeco Instruments will offset losses from the drop in Veeco Instruments' long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Veeco Instruments vs. NVE Corporation | Veeco Instruments vs. Photronics | Veeco Instruments vs. Kulicke and Soffa | Veeco Instruments vs. Alvarium Tiedemann Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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