Correlation Between KLA Tencor and Aehr Test
Can any of the company-specific risk be diversified away by investing in both KLA Tencor 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 KLA Tencor and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Aehr Test Systems, you can compare the effects of market volatilities on KLA Tencor 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 KLA Tencor with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Aehr Test.
Diversification Opportunities for KLA Tencor and Aehr Test
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KLA and Aehr is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor 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 KLA Tencor 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 KLA Tencor 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 KLA Tencor i.e., KLA Tencor and Aehr Test go up and down completely randomly.
Pair Corralation between KLA Tencor and Aehr Test
Given the investment horizon of 90 days KLA Tencor is expected to under-perform the Aehr Test. But the stock apears to be less risky and, when comparing its historical volatility, KLA Tencor is 2.53 times less risky than Aehr Test. The stock trades about -0.01 of its potential returns per unit of risk. The Aehr Test Systems is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,226 in Aehr Test Systems on October 31, 2024 and sell it today you would lose (144.00) from holding Aehr Test Systems or give up 11.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Tencor vs. Aehr Test Systems
Performance |
| Timeline |
| KLA Tencor |
| Aehr Test Systems |
KLA Tencor and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Aehr Test
The main advantage of trading using opposite KLA Tencor and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor 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.| KLA Tencor vs. Diodes Incorporated | KLA Tencor vs. Daqo New Energy | KLA Tencor vs. Micron Technology | KLA Tencor vs. MagnaChip Semiconductor |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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