Correlation Between Compania Cervecerias and Aehr Test
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Aehr Test 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 Compania Cervecerias and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and Aehr Test Systems, you can compare the effects of market volatilities on Compania Cervecerias and Aehr Test 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 Compania Cervecerias with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Aehr Test.
Diversification Opportunities for Compania Cervecerias and Aehr Test
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compania and Aehr is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Aehr Test Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aehr Test Systems and Compania Cervecerias 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 Compania Cervecerias Unidas are associated (or correlated) with Aehr Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aehr Test Systems has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Aehr Test go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Aehr Test
Considering the 90-day investment horizon Compania Cervecerias is expected to generate 1.15 times less return on investment than Aehr Test. But when comparing it to its historical volatility, Compania Cervecerias Unidas is 2.32 times less risky than Aehr Test. It trades about 0.08 of its potential returns per unit of risk. Aehr Test Systems is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,171 in Aehr Test Systems on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Aehr Test Systems or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Aehr Test Systems
Performance |
| Timeline |
| Compania Cervecerias |
| Aehr Test Systems |
Compania Cervecerias and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Aehr Test
The main advantage of trading using opposite Compania Cervecerias and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Aehr Test 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 Aehr Test will offset losses from the drop in Aehr Test's long position.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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