Correlation Between Altair Engineering and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Sabra Health 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 Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Sabra Health Care, you can compare the effects of market volatilities on Altair Engineering and Sabra Health 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 Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Sabra Health.
Diversification Opportunities for Altair Engineering and Sabra Health
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altair and Sabra is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Health Care 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 Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of Altair Engineering i.e., Altair Engineering and Sabra Health go up and down completely randomly.
Pair Corralation between Altair Engineering and Sabra Health
Assuming the 90 days horizon Altair Engineering is expected to generate 0.54 times more return on investment than Sabra Health. However, Altair Engineering is 1.85 times less risky than Sabra Health. It trades about 0.17 of its potential returns per unit of risk. Sabra Health Care is currently generating about -0.32 per unit of risk. If you would invest 9,750 in Altair Engineering on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Altair Engineering or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Sabra Health Care
Performance |
| Timeline |
| Altair Engineering |
| Sabra Health Care |
Altair Engineering and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Sabra Health
The main advantage of trading using opposite Altair Engineering and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Sabra Health 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 Sabra Health will offset losses from the drop in Sabra Health's long position.| Altair Engineering vs. Adyen NV | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. SIVERS SEMICONDUCTORS AB | Altair Engineering vs. Norsk Hydro ASA |
| Sabra Health vs. The Yokohama Rubber | Sabra Health vs. IMPERIAL TOBACCO | Sabra Health vs. VULCAN MATERIALS | Sabra Health vs. JAPAN TOBACCO UNSPADR12 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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