Correlation Between LS Starrett and Aehr Test
Can any of the company-specific risk be diversified away by investing in both LS Starrett 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 LS Starrett and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The LS Starrett and Aehr Test Systems, you can compare the effects of market volatilities on LS Starrett 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 LS Starrett with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Starrett and Aehr Test.
Diversification Opportunities for LS Starrett and Aehr Test
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SCXLB and Aehr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The LS Starrett 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 LS Starrett 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 The LS Starrett 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 LS Starrett i.e., LS Starrett and Aehr Test go up and down completely randomly.
Pair Corralation between LS Starrett and Aehr Test
Assuming the 90 days horizon The LS Starrett is expected to generate 0.48 times more return on investment than Aehr Test. However, The LS Starrett is 2.09 times less risky than Aehr Test. It trades about 0.04 of its potential returns per unit of risk. Aehr Test Systems is currently generating about 0.0 per unit of risk. If you would invest 855.00 in The LS Starrett on September 3, 2024 and sell it today you would earn a total of 245.00 from holding The LS Starrett or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 73.33% |
| Values | Daily Returns |
The LS Starrett vs. Aehr Test Systems
Performance |
| Timeline |
| LS Starrett |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aehr Test Systems |
LS Starrett and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Starrett and Aehr Test
The main advantage of trading using opposite LS Starrett and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Starrett 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.| LS Starrett vs. Eldorado Gold Corp | LS Starrett vs. Hudson Pacific Properties | LS Starrett vs. CECO Environmental Corp | LS Starrett vs. SFL Corporation |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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