Correlation Between HP and Atomera
Can any of the company-specific risk be diversified away by investing in both HP and Atomera 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 HP and Atomera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Atomera, you can compare the effects of market volatilities on HP and Atomera 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 HP with a short position of Atomera. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Atomera.
Diversification Opportunities for HP and Atomera
Pay attention - limited upside
The 3 months correlation between HP and Atomera is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Atomera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomera and HP 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 HP Inc are associated (or correlated) with Atomera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atomera has no effect on the direction of HP i.e., HP and Atomera go up and down completely randomly.
Pair Corralation between HP and Atomera
Considering the 90-day investment horizon HP Inc is expected to under-perform the Atomera. But the stock apears to be less risky and, when comparing its historical volatility, HP Inc is 4.8 times less risky than Atomera. The stock trades about -0.08 of its potential returns per unit of risk. The Atomera is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Atomera on October 26, 2024 and sell it today you would earn a total of 702.00 from holding Atomera or generate 190.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Atomera
Performance |
| Timeline |
| HP Inc |
| Atomera |
HP and Atomera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Atomera
The main advantage of trading using opposite HP and Atomera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Atomera 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 Atomera will offset losses from the drop in Atomera's long position.The idea behind HP Inc and Atomera 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.| Atomera vs. Axcelis Technologies | Atomera vs. inTest | Atomera vs. Lam Research Corp | Atomera vs. Photronics |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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