Correlation Between Altair Engineering and LION ONE
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and LION ONE 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 LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and LION ONE METALS, you can compare the effects of market volatilities on Altair Engineering and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and LION ONE.
Diversification Opportunities for Altair Engineering and LION ONE
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altair and LION is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Altair Engineering i.e., Altair Engineering and LION ONE go up and down completely randomly.
Pair Corralation between Altair Engineering and LION ONE
Assuming the 90 days horizon Altair Engineering is expected to generate 0.41 times more return on investment than LION ONE. However, Altair Engineering is 2.43 times less risky than LION ONE. It trades about 0.06 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.02 per unit of risk. If you would invest 6,450 in Altair Engineering on January 11, 2025 and sell it today you would earn a total of 3,850 from holding Altair Engineering or generate 59.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.01% |
| Values | Daily Returns |
Altair Engineering vs. LION ONE METALS
Performance |
| Timeline |
| Altair Engineering |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| LION ONE METALS |
Altair Engineering and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and LION ONE
The main advantage of trading using opposite Altair Engineering and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Altair Engineering vs. Emperor Entertainment Hotel | Altair Engineering vs. Ubisoft Entertainment SA | Altair Engineering vs. Lifeway Foods | Altair Engineering vs. Nomad Foods |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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