Correlation Between Ichor Holdings and Aehr Test
Can any of the company-specific risk be diversified away by investing in both Ichor Holdings 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 Ichor Holdings and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichor Holdings and Aehr Test Systems, you can compare the effects of market volatilities on Ichor Holdings 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 Ichor Holdings with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichor Holdings and Aehr Test.
Diversification Opportunities for Ichor Holdings and Aehr Test
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ichor and Aehr is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings 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 Ichor Holdings 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 Ichor Holdings 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 Ichor Holdings i.e., Ichor Holdings and Aehr Test go up and down completely randomly.
Pair Corralation between Ichor Holdings and Aehr Test
Given the investment horizon of 90 days Ichor Holdings is expected to generate 0.6 times more return on investment than Aehr Test. However, Ichor Holdings is 1.66 times less risky than Aehr Test. It trades about 0.05 of its potential returns per unit of risk. Aehr Test Systems is currently generating about -0.02 per unit of risk. If you would invest 2,625 in Ichor Holdings on August 24, 2024 and sell it today you would earn a total of 708.00 from holding Ichor Holdings or generate 26.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ichor Holdings vs. Aehr Test Systems
Performance |
| Timeline |
| Ichor Holdings |
| Aehr Test Systems |
Ichor Holdings and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichor Holdings and Aehr Test
The main advantage of trading using opposite Ichor Holdings and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Holdings 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.| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Veeco Instruments | Ichor Holdings vs. Ultra Clean Holdings |
| Aehr Test vs. Amtech Systems | Aehr Test vs. Veeco Instruments | Aehr Test vs. Ichor Holdings | Aehr Test vs. Axcelis Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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