Correlation Between Freedom Holding and Aehr Test
Can any of the company-specific risk be diversified away by investing in both Freedom Holding 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 Freedom Holding and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Holding Corp and Aehr Test Systems, you can compare the effects of market volatilities on Freedom Holding 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 Freedom Holding with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Aehr Test.
Diversification Opportunities for Freedom Holding and Aehr Test
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freedom and Aehr is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp 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 Freedom Holding 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 Freedom Holding Corp 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 Freedom Holding i.e., Freedom Holding and Aehr Test go up and down completely randomly.
Pair Corralation between Freedom Holding and Aehr Test
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.51 times more return on investment than Aehr Test. However, Freedom Holding Corp is 1.95 times less risky than Aehr Test. It trades about 0.36 of its potential returns per unit of risk. Aehr Test Systems is currently generating about 0.13 per unit of risk. If you would invest 10,459 in Freedom Holding Corp on September 4, 2024 and sell it today you would earn a total of 1,488 from holding Freedom Holding Corp or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Aehr Test Systems
Performance |
| Timeline |
| Freedom Holding Corp |
| Aehr Test Systems |
Freedom Holding and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Aehr Test
The main advantage of trading using opposite Freedom Holding and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding 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.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |