Correlation Between SOGECLAIR and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR 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 SOGECLAIR and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOGECLAIR SA INH and Altair Engineering, you can compare the effects of market volatilities on SOGECLAIR 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 SOGECLAIR with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Altair Engineering.
Diversification Opportunities for SOGECLAIR and Altair Engineering
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOGECLAIR and Altair is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and SOGECLAIR 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 SOGECLAIR SA INH 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 SOGECLAIR i.e., SOGECLAIR and Altair Engineering go up and down completely randomly.
Pair Corralation between SOGECLAIR and Altair Engineering
Assuming the 90 days horizon SOGECLAIR SA INH is expected to under-perform the Altair Engineering. In addition to that, SOGECLAIR is 1.55 times more volatile than Altair Engineering. It trades about -0.06 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.17 per unit of volatility. If you would invest 7,400 in Altair Engineering on November 3, 2024 and sell it today you would earn a total of 3,200 from holding Altair Engineering or generate 43.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. Altair Engineering
Performance |
| Timeline |
| SOGECLAIR SA INH |
| Altair Engineering |
SOGECLAIR and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and Altair Engineering
The main advantage of trading using opposite SOGECLAIR and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR 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.| SOGECLAIR vs. CANON MARKETING JP | SOGECLAIR vs. CARSALESCOM | SOGECLAIR vs. Firan Technology Group | SOGECLAIR vs. Canon Marketing Japan |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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