Correlation Between Enter Air and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Enter Air and Altair Engineering 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 Enter Air and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Altair Engineering, you can compare the effects of market volatilities on Enter Air and Altair Engineering 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 Enter Air with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Altair Engineering.
Diversification Opportunities for Enter Air and Altair Engineering
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enter and Altair is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Enter Air 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 Enter Air SA are associated (or correlated) with Altair Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Engineering has no effect on the direction of Enter Air i.e., Enter Air and Altair Engineering go up and down completely randomly.
Pair Corralation between Enter Air and Altair Engineering
Assuming the 90 days trading horizon Enter Air SA is expected to generate 5.15 times more return on investment than Altair Engineering. However, Enter Air is 5.15 times more volatile than Altair Engineering. It trades about 0.05 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.15 per unit of risk. If you would invest 1,206 in Enter Air SA on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Enter Air SA or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. Altair Engineering
Performance |
| Timeline |
| Enter Air SA |
| Altair Engineering |
Enter Air and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Altair Engineering
The main advantage of trading using opposite Enter Air and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, Altair Engineering 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 Altair Engineering will offset losses from the drop in Altair Engineering's long position.| Enter Air vs. Genco Shipping Trading | Enter Air vs. Siamgas And Petrochemicals | Enter Air vs. REINET INVESTMENTS SCA | Enter Air vs. Mitsui Chemicals |
| Altair Engineering vs. Summit Hotel Properties | Altair Engineering vs. INTERCONT HOTELS | Altair Engineering vs. Meli Hotels International | Altair Engineering vs. COVIVIO HOTELS INH |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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