Correlation Between Altair Engineering and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Charoen Pokphand 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 Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Charoen Pokphand Foods, you can compare the effects of market volatilities on Altair Engineering and Charoen Pokphand 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 Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Charoen Pokphand.
Diversification Opportunities for Altair Engineering and Charoen Pokphand
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altair and Charoen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods 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 Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of Altair Engineering i.e., Altair Engineering and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Altair Engineering and Charoen Pokphand
Assuming the 90 days horizon Altair Engineering is expected to generate 0.24 times more return on investment than Charoen Pokphand. However, Altair Engineering is 4.19 times less risky than Charoen Pokphand. It trades about 0.44 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.16 per unit of risk. If you would invest 10,100 in Altair Engineering on October 9, 2024 and sell it today you would earn a total of 500.00 from holding Altair Engineering or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Altair Engineering |
| Charoen Pokphand Foods |
Altair Engineering and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Charoen Pokphand
The main advantage of trading using opposite Altair Engineering and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| Altair Engineering vs. USU Software AG | Altair Engineering vs. JAPAN TOBACCO UNSPADR12 | Altair Engineering vs. CPU SOFTWAREHOUSE | Altair Engineering vs. IMPERIAL TOBACCO |
| Charoen Pokphand vs. NEWELL RUBBERMAID | Charoen Pokphand vs. Rayonier Advanced Materials | Charoen Pokphand vs. Vulcan Materials | Charoen Pokphand vs. Goodyear Tire Rubber |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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