Correlation Between Altair Engineering and United Breweries
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and United Breweries 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 United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and United Breweries Co, you can compare the effects of market volatilities on Altair Engineering and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and United Breweries.
Diversification Opportunities for Altair Engineering and United Breweries
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and United is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of Altair Engineering i.e., Altair Engineering and United Breweries go up and down completely randomly.
Pair Corralation between Altair Engineering and United Breweries
Assuming the 90 days horizon Altair Engineering is expected to generate 1.24 times more return on investment than United Breweries. However, Altair Engineering is 1.24 times more volatile than United Breweries Co. It trades about 0.08 of its potential returns per unit of risk. United Breweries Co is currently generating about 0.0 per unit of risk. If you would invest 6,700 in Altair Engineering on September 14, 2024 and sell it today you would earn a total of 3,300 from holding Altair Engineering or generate 49.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. United Breweries Co
Performance |
| Timeline |
| Altair Engineering |
| United Breweries |
Altair Engineering and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and United Breweries
The main advantage of trading using opposite Altair Engineering and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| Altair Engineering vs. Adyen NV | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. SIVERS SEMICONDUCTORS AB | Altair Engineering vs. Norsk Hydro ASA |
| United Breweries vs. National Retail Properties | United Breweries vs. EBRO FOODS | United Breweries vs. Cal Maine Foods | United Breweries vs. MARKET VECTR RETAIL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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