Correlation Between Origin Agritech and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Origin Agritech 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 Origin Agritech and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Altair Engineering, you can compare the effects of market volatilities on Origin Agritech 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 Origin Agritech with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Altair Engineering.
Diversification Opportunities for Origin Agritech and Altair Engineering
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Altair is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Origin Agritech 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 Origin Agritech 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 Origin Agritech i.e., Origin Agritech and Altair Engineering go up and down completely randomly.
Pair Corralation between Origin Agritech and Altair Engineering
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Altair Engineering. In addition to that, Origin Agritech is 2.4 times more volatile than Altair Engineering. It trades about -0.07 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.08 per unit of volatility. If you would invest 8,150 in Altair Engineering on September 3, 2024 and sell it today you would earn a total of 1,800 from holding Altair Engineering or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Altair Engineering
Performance |
| Timeline |
| Origin Agritech |
| Altair Engineering |
Origin Agritech and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Altair Engineering
The main advantage of trading using opposite Origin Agritech and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech 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.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
| Altair Engineering vs. Microsoft | Altair Engineering vs. CrowdStrike Holdings | Altair Engineering vs. VeriSign | Altair Engineering vs. Palantir Technologies |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |