Correlation Between Altair Engineering and International Flavors
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and International Flavors 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 International Flavors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and International Flavors Fragrances, you can compare the effects of market volatilities on Altair Engineering and International Flavors 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 International Flavors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and International Flavors.
Diversification Opportunities for Altair Engineering and International Flavors
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altair and International is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and International Flavors Fragranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Flavors 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 International Flavors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Flavors has no effect on the direction of Altair Engineering i.e., Altair Engineering and International Flavors go up and down completely randomly.
Pair Corralation between Altair Engineering and International Flavors
Assuming the 90 days horizon Altair Engineering is expected to generate 1.01 times more return on investment than International Flavors. However, Altair Engineering is 1.01 times more volatile than International Flavors Fragrances. It trades about 0.5 of its potential returns per unit of risk. International Flavors Fragrances is currently generating about -0.3 per unit of risk. If you would invest 10,000 in Altair Engineering on October 7, 2024 and sell it today you would earn a total of 600.00 from holding Altair Engineering or generate 6.0% 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. International Flavors Fragranc
Performance |
| Timeline |
| Altair Engineering |
| International Flavors |
Altair Engineering and International Flavors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and International Flavors
The main advantage of trading using opposite Altair Engineering and International Flavors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, International Flavors 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 International Flavors will offset losses from the drop in International Flavors' long position.| Altair Engineering vs. Axway Software SA | Altair Engineering vs. DATA MODUL | Altair Engineering vs. GBS Software AG | Altair Engineering vs. Check Point Software |
| International Flavors vs. Infrastrutture Wireless Italiane | International Flavors vs. Corporate Office Properties | International Flavors vs. SOFI TECHNOLOGIES | International Flavors vs. OFFICE DEPOT |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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