Correlation Between Altair Engineering and China Coal
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and China Coal 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 China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and China Coal Energy, you can compare the effects of market volatilities on Altair Engineering and China Coal 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 China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and China Coal.
Diversification Opportunities for Altair Engineering and China Coal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and China is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of Altair Engineering i.e., Altair Engineering and China Coal go up and down completely randomly.
Pair Corralation between Altair Engineering and China Coal
Assuming the 90 days horizon Altair Engineering is expected to generate 0.27 times more return on investment than China Coal. However, Altair Engineering is 3.73 times less risky than China Coal. It trades about 0.3 of its potential returns per unit of risk. China Coal Energy is currently generating about -0.01 per unit of risk. If you would invest 9,500 in Altair Engineering on September 5, 2024 and sell it today you would earn a total of 500.00 from holding Altair Engineering or generate 5.26% 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. China Coal Energy
Performance |
| Timeline |
| Altair Engineering |
| China Coal Energy |
Altair Engineering and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and China Coal
The main advantage of trading using opposite Altair Engineering and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, China Coal 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 China Coal will offset losses from the drop in China Coal's long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. VeriSign | Altair Engineering vs. Palantir Technologies |
| China Coal vs. NORWEGIAN AIR SHUT | China Coal vs. HF SINCLAIR P | China Coal vs. Altair Engineering | China Coal vs. Elmos Semiconductor SE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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