Correlation Between KLA Tencor and Atomera

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

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

Diversification Opportunities for KLA Tencor and Atomera

-0.75

Correlation Coefficient

KLA Tencor  Atomera

Pay attention - limited upside

The 3 months correlation between KLA and Atomera is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Atomera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomera and KLA Tencor 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 KLA Tencor 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 KLA Tencor i.e., KLA Tencor and Atomera go up and down completely randomly.

Pair Corralation between KLA Tencor and Atomera

Given the investment horizon of 90 days KLA Tencor is expected to under-perform the Atomera. But the stock apears to be less risky and, when comparing its historical volatility, KLA Tencor is 1.85 times less risky than Atomera. The stock trades about -0.04 of its potential returns per unit of risk. The Atomera is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  389.00  in Atomera on September 22, 2024 and sell it today you would earn a total of  510.00  from holding Atomera or generate 131.11% return on investment over 90 days.

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

KLA Tencor  vs.  Atomera

KLA Tencor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLA Tencor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with KLA Tencor and Atomera

The main advantage of trading using opposite KLA Tencor and Atomera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor 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 KLA Tencor 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.