Correlation Between Atomera and SmartKem, Common

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

By analyzing existing cross correlation between Atomera and SmartKem, Common Stock, you can compare the effects of market volatilities on Atomera and SmartKem, Common 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 Atomera with a short position of SmartKem, Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atomera and SmartKem, Common.

Diversification Opportunities for Atomera and SmartKem, Common

-0.02

Correlation Coefficient

Atomera  SmartKem, Common

Good diversification

The 3 months correlation between Atomera and SmartKem, is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Atomera and SmartKem, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartKem, Common Stock and Atomera 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 Atomera are associated (or correlated) with SmartKem, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartKem, Common Stock has no effect on the direction of Atomera i.e., Atomera and SmartKem, Common go up and down completely randomly.

Pair Corralation between Atomera and SmartKem, Common

Given the investment horizon of 90 days Atomera is expected to generate 0.47 times more return on investment than SmartKem, Common. However, Atomera is 2.13 times less risky than SmartKem, Common. It trades about 0.34 of its potential returns per unit of risk. SmartKem, Common Stock is currently generating about 0.01 per unit of risk. If you would invest  245.00  in Atomera on September 22, 2024 and sell it today you would earn a total of  654.00  from holding Atomera or generate 266.94% return on investment over 90 days.

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

Atomera  vs.  SmartKem, Common Stock

Atomera

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Atomera are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Atomera displayed solid returns over the last few months and may actually be approaching a breakup point.

SmartKem, Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartKem, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite unfluctuating basic indicators, SmartKem, Common may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Atomera and SmartKem, Common

The main advantage of trading using opposite Atomera and SmartKem, Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atomera position performs unexpectedly, SmartKem, Common 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 SmartKem, Common will offset losses from the drop in SmartKem, Common's long position.

The idea behind Atomera and SmartKem, Common Stock 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.