Correlation Between Altair Engineering and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and LUMI GRUPPEN 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 Altair Engineering and LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and LUMI GRUPPEN AS, you can compare the effects of market volatilities on Altair Engineering and LUMI GRUPPEN 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 Altair Engineering with a short position of LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and LUMI GRUPPEN.
Diversification Opportunities for Altair Engineering and LUMI GRUPPEN
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Altair and LUMI is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS and Altair Engineering 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 Altair Engineering are associated (or correlated) with LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of Altair Engineering i.e., Altair Engineering and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between Altair Engineering and LUMI GRUPPEN
Assuming the 90 days horizon Altair Engineering is expected to generate 0.16 times more return on investment than LUMI GRUPPEN. However, Altair Engineering is 6.11 times less risky than LUMI GRUPPEN. It trades about 0.1 of its potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about -0.03 per unit of risk. If you would invest 10,500 in Altair Engineering on November 6, 2024 and sell it today you would earn a total of 100.00 from holding Altair Engineering or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Altair Engineering vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| Altair Engineering |
| LUMI GRUPPEN AS |
Altair Engineering and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and LUMI GRUPPEN
The main advantage of trading using opposite Altair Engineering and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| Altair Engineering vs. Electronic Arts | Altair Engineering vs. KENEDIX OFFICE INV | Altair Engineering vs. STORE ELECTRONIC | Altair Engineering vs. TT Electronics PLC |
| LUMI GRUPPEN vs. PENN Entertainment | LUMI GRUPPEN vs. REMEDY ENTERTAINMENT OYJ | LUMI GRUPPEN vs. Globex Mining Enterprises | LUMI GRUPPEN vs. De Grey Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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