Correlation Between Meta Materials and Aterian

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

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

Diversification Opportunities for Meta Materials and Aterian

0.61

Correlation Coefficient

Meta Materials  Aterian

Poor diversification

The 3 months correlation between Meta and Aterian is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Meta Materials and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Meta Materials 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 Meta Materials are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Meta Materials i.e., Meta Materials and Aterian go up and down completely randomly.

Pair Corralation between Meta Materials and Aterian

Given the investment horizon of 90 days Meta Materials is expected to generate 12.43 times more return on investment than Aterian. However, Meta Materials is 12.43 times more volatile than Aterian. It trades about 0.06 of its potential returns per unit of risk. Aterian is currently generating about -0.05 per unit of risk. If you would invest  45.00  in Meta Materials on September 3, 2024 and sell it today you would lose (38.90) from holding Meta Materials or give up 86.44% of portfolio value over 90 days.

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

Meta Materials  vs.  Aterian

Meta Materials

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Meta Materials unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Meta Materials and Aterian

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

The idea behind Meta Materials and Aterian 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.