Correlation Between Altair Engineering and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Alaska Air 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 Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Alaska Air Group, you can compare the effects of market volatilities on Altair Engineering and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Alaska Air.
Diversification Opportunities for Altair Engineering and Alaska Air
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Altair and Alaska is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Altair Engineering i.e., Altair Engineering and Alaska Air go up and down completely randomly.
Pair Corralation between Altair Engineering and Alaska Air
Assuming the 90 days horizon Altair Engineering is expected to generate 0.93 times more return on investment than Alaska Air. However, Altair Engineering is 1.07 times less risky than Alaska Air. It trades about 0.09 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.06 per unit of risk. If you would invest 6,100 in Altair Engineering on August 29, 2024 and sell it today you would earn a total of 3,850 from holding Altair Engineering or generate 63.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Alaska Air Group
Performance |
| Timeline |
| Altair Engineering |
| Alaska Air Group |
Altair Engineering and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Alaska Air
The main advantage of trading using opposite Altair Engineering and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. Adobe Inc | Altair Engineering vs. ADYEN NV UNSPADR001 | Altair Engineering vs. Square Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |