Correlation Between Lam Research and Atomera
Can any of the company-specific risk be diversified away by investing in both Lam Research 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 Lam Research and Atomera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lam Research Corp and Atomera, you can compare the effects of market volatilities on Lam Research 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 Lam Research with a short position of Atomera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Research and Atomera.
Diversification Opportunities for Lam Research and Atomera
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lam and Atomera is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lam Research Corp and Atomera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomera and Lam Research 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 Lam Research Corp 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 Lam Research i.e., Lam Research and Atomera go up and down completely randomly.
Pair Corralation between Lam Research and Atomera
Given the investment horizon of 90 days Lam Research Corp is expected to generate 0.49 times more return on investment than Atomera. However, Lam Research Corp is 2.05 times less risky than Atomera. It trades about 0.06 of its potential returns per unit of risk. Atomera is currently generating about 0.02 per unit of risk. If you would invest 4,342 in Lam Research Corp on August 28, 2024 and sell it today you would earn a total of 3,029 from holding Lam Research Corp or generate 69.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Research Corp vs. Atomera
Performance |
| Timeline |
| Lam Research Corp |
| Atomera |
Lam Research and Atomera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Research and Atomera
The main advantage of trading using opposite Lam Research and Atomera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Research 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.| Lam Research vs. ASML Holding NV | Lam Research vs. KLA Tencor | Lam Research vs. Axcelis Technologies | Lam Research vs. Teradyne |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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