Correlation Between Materion and Global Atomic

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

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

Diversification Opportunities for Materion and Global Atomic

-0.36

Correlation Coefficient

Materion  Global Atomic

Very good diversification

The 3 months correlation between Materion and Global is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Materion and Global Atomic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Atomic Corp and Materion 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 Materion are associated (or correlated) with Global Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Atomic Corp has no effect on the direction of Materion i.e., Materion and Global Atomic go up and down completely randomly.

Pair Corralation between Materion and Global Atomic

Given the investment horizon of 90 days Materion is expected to generate 0.58 times more return on investment than Global Atomic. However, Materion is 1.71 times less risky than Global Atomic. It trades about 0.06 of its potential returns per unit of risk. Global Atomic Corp is currently generating about -0.02 per unit of risk. If you would invest  10,619  in Materion on September 2, 2024 and sell it today you would earn a total of  943.00  from holding Materion or generate 8.88% return on investment over 90 days.

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

Materion  vs.  Global Atomic Corp

Materion

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Materion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Materion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Atomic Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Atomic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Global Atomic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Materion and Global Atomic

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

The idea behind Materion and Global Atomic Corp 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.

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.