Correlation Between Altair Engineering and LG Display
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and LG Display 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 LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and LG Display Co, you can compare the effects of market volatilities on Altair Engineering and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and LG Display.
Diversification Opportunities for Altair Engineering and LG Display
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altair and LGA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Altair Engineering i.e., Altair Engineering and LG Display go up and down completely randomly.
Pair Corralation between Altair Engineering and LG Display
Assuming the 90 days horizon Altair Engineering is expected to generate 0.69 times more return on investment than LG Display. However, Altair Engineering is 1.45 times less risky than LG Display. It trades about 0.23 of its potential returns per unit of risk. LG Display Co is currently generating about -0.13 per unit of risk. If you would invest 9,550 in Altair Engineering on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Altair Engineering or generate 4.19% 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. LG Display Co
Performance |
| Timeline |
| Altair Engineering |
| LG Display |
Altair Engineering and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and LG Display
The main advantage of trading using opposite Altair Engineering and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Altair Engineering vs. Calibre Mining Corp | Altair Engineering vs. Compagnie Plastic Omnium | Altair Engineering vs. Plastic Omnium | Altair Engineering vs. GOODYEAR T RUBBER |
| LG Display vs. Apple Inc | LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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