Correlation Between PLAYMATES TOYS and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS 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 PLAYMATES TOYS and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Altair Engineering, you can compare the effects of market volatilities on PLAYMATES TOYS 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 PLAYMATES TOYS with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Altair Engineering.
Diversification Opportunities for PLAYMATES TOYS and Altair Engineering
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYMATES and Altair is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS i.e., PLAYMATES TOYS and Altair Engineering go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Altair Engineering
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 3.51 times less return on investment than Altair Engineering. In addition to that, PLAYMATES TOYS is 2.86 times more volatile than Altair Engineering. It trades about 0.02 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.2 per unit of volatility. If you would invest 8,300 in Altair Engineering on October 18, 2024 and sell it today you would earn a total of 2,400 from holding Altair Engineering or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Altair Engineering
Performance |
| Timeline |
| PLAYMATES TOYS |
| Altair Engineering |
PLAYMATES TOYS and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Altair Engineering
The main advantage of trading using opposite PLAYMATES TOYS and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS 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.| PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc |
| Altair Engineering vs. PLAYMATES TOYS | Altair Engineering vs. TRAVEL LEISURE DL 01 | Altair Engineering vs. COLUMBIA SPORTSWEAR | Altair Engineering vs. Sumitomo Mitsui Construction |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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