Correlation Between Altair Engineering and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and BURLINGTON STORES 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 BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and BURLINGTON STORES, you can compare the effects of market volatilities on Altair Engineering and BURLINGTON STORES 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 BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and BURLINGTON STORES.
Diversification Opportunities for Altair Engineering and BURLINGTON STORES
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altair and BURLINGTON is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of Altair Engineering i.e., Altair Engineering and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between Altair Engineering and BURLINGTON STORES
Assuming the 90 days horizon Altair Engineering is expected to generate 0.84 times more return on investment than BURLINGTON STORES. However, Altair Engineering is 1.19 times less risky than BURLINGTON STORES. It trades about 0.09 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.04 per unit of risk. If you would invest 4,500 in Altair Engineering on September 2, 2024 and sell it today you would earn a total of 5,450 from holding Altair Engineering or generate 121.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. BURLINGTON STORES
Performance |
| Timeline |
| Altair Engineering |
| BURLINGTON STORES |
Altair Engineering and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and BURLINGTON STORES
The main advantage of trading using opposite Altair Engineering and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, BURLINGTON STORES 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 BURLINGTON STORES will offset losses from the drop in BURLINGTON STORES's long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. NMI Holdings | Altair Engineering vs. Origin Agritech |
| BURLINGTON STORES vs. SIVERS SEMICONDUCTORS AB | BURLINGTON STORES vs. Darden Restaurants | BURLINGTON STORES vs. Reliance Steel Aluminum | BURLINGTON STORES vs. Q2M Managementberatung AG |
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.
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