Correlation Between Altair Engineering and Cintas
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Cintas 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 Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Cintas, you can compare the effects of market volatilities on Altair Engineering and Cintas 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 Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Cintas.
Diversification Opportunities for Altair Engineering and Cintas
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altair and Cintas is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Altair Engineering i.e., Altair Engineering and Cintas go up and down completely randomly.
Pair Corralation between Altair Engineering and Cintas
Assuming the 90 days horizon Altair Engineering is expected to generate 1.06 times less return on investment than Cintas. In addition to that, Altair Engineering is 1.38 times more volatile than Cintas. It trades about 0.06 of its total potential returns per unit of risk. Cintas is currently generating about 0.09 per unit of volatility. If you would invest 9,851 in Cintas on January 17, 2025 and sell it today you would earn a total of 8,049 from holding Cintas or generate 81.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.02% |
| Values | Daily Returns |
Altair Engineering vs. Cintas
Performance |
| Timeline |
| Altair Engineering |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Cintas |
Altair Engineering and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Cintas
The main advantage of trading using opposite Altair Engineering and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. Square Inc | Altair Engineering vs. VeriSign | Altair Engineering vs. Palantir Technologies |
| Cintas vs. UNIQA INSURANCE GR | Cintas vs. SBI Insurance Group | Cintas vs. PANIN INSURANCE | Cintas vs. INSURANCE AUST GRP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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