Correlation Between Veeco Instruments and Atomera

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

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

Diversification Opportunities for Veeco Instruments and Atomera

0.25

Correlation Coefficient

Veeco Instruments  Atomera

Modest diversification

The 3 months correlation between Veeco and Atomera is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Atomera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomera and Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments i.e., Veeco Instruments and Atomera go up and down completely randomly.

Pair Corralation between Veeco Instruments and Atomera

Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Atomera. But the stock apears to be less risky and, when comparing its historical volatility, Veeco Instruments is 4.81 times less risky than Atomera. The stock trades about -0.09 of its potential returns per unit of risk. The Atomera is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  618.00  in Atomera on November 28, 2024 and sell it today you would lose (83.00) from holding Atomera or give up 13.43% of portfolio value over 90 days.

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

Veeco Instruments  vs.  Atomera

Veeco Instruments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veeco Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Atomera

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atomera are ranked lower than 3 (%) 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 Veeco Instruments and Atomera

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

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.