Correlation Between Altair Engineering and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Santander Bank 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 Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Santander Bank Polska, you can compare the effects of market volatilities on Altair Engineering and Santander Bank 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 Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Santander Bank.
Diversification Opportunities for Altair Engineering and Santander Bank
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altair and Santander is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Santander Bank Polska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santander Bank Polska 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 Santander Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santander Bank Polska has no effect on the direction of Altair Engineering i.e., Altair Engineering and Santander Bank go up and down completely randomly.
Pair Corralation between Altair Engineering and Santander Bank
Assuming the 90 days horizon Altair Engineering is expected to generate 0.77 times more return on investment than Santander Bank. However, Altair Engineering is 1.3 times less risky than Santander Bank. It trades about 0.17 of its potential returns per unit of risk. Santander Bank Polska is currently generating about -0.09 per unit of risk. If you would invest 8,150 in Altair Engineering on September 2, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Santander Bank Polska
Performance |
| Timeline |
| Altair Engineering |
| Santander Bank Polska |
Altair Engineering and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Santander Bank
The main advantage of trading using opposite Altair Engineering and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Santander Bank 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 Santander Bank will offset losses from the drop in Santander Bank's long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. NMI Holdings | Altair Engineering vs. Origin Agritech |
| Santander Bank vs. Ryanair Holdings plc | Santander Bank vs. DELTA AIR LINES | Santander Bank vs. Altair Engineering | Santander Bank vs. Air New Zealand |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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