Correlation Between Maxeon Solar and Aehr Test

Can any of the company-specific risk be diversified away by investing in both Maxeon Solar 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 Maxeon Solar and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maxeon Solar Technologies and Aehr Test Systems, you can compare the effects of market volatilities on Maxeon Solar 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 Maxeon Solar with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Aehr Test.

Diversification Opportunities for Maxeon Solar and Aehr Test

-0.71

Correlation Coefficient

Maxeon Solar  Aehr Test

Pay attention - limited upside

The 3 months correlation between Maxeon and Aehr is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies 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 Maxeon Solar 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 Maxeon Solar Technologies 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 Maxeon Solar i.e., Maxeon Solar and Aehr Test go up and down completely randomly.

Pair Corralation between Maxeon Solar and Aehr Test

Given the investment horizon of 90 days Maxeon Solar Technologies is expected to under-perform the Aehr Test. In addition to that, Maxeon Solar is 1.04 times more volatile than Aehr Test Systems. It trades about -0.1 of its total potential returns per unit of risk. Aehr Test Systems is currently generating about 0.17 per unit of volatility. If you would invest  1,116  in Aehr Test Systems on September 20, 2024 and sell it today you would earn a total of  250.00  from holding Aehr Test Systems or generate 22.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Maxeon Solar Technologies  vs.  Aehr Test Systems

Maxeon Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxeon Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aehr Test Systems

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aehr Test Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Aehr Test reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxeon Solar and Aehr Test

The main advantage of trading using opposite Maxeon Solar and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxeon Solar 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.

The idea behind Maxeon Solar Technologies and Aehr Test Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.