Correlation Between Altair Engineering and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and SEALED AIR 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 SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and SEALED AIR , you can compare the effects of market volatilities on Altair Engineering and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and SEALED AIR.
Diversification Opportunities for Altair Engineering and SEALED AIR
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altair and SEALED is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of Altair Engineering i.e., Altair Engineering and SEALED AIR go up and down completely randomly.
Pair Corralation between Altair Engineering and SEALED AIR
Assuming the 90 days horizon Altair Engineering is expected to generate 1.06 times more return on investment than SEALED AIR. However, Altair Engineering is 1.06 times more volatile than SEALED AIR . It trades about 0.08 of its potential returns per unit of risk. SEALED AIR is currently generating about -0.02 per unit of risk. If you would invest 4,560 in Altair Engineering on August 28, 2024 and sell it today you would earn a total of 5,440 from holding Altair Engineering or generate 119.3% 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. SEALED AIR
Performance |
| Timeline |
| Altair Engineering |
| SEALED AIR |
Altair Engineering and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and SEALED AIR
The main advantage of trading using opposite Altair Engineering and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| Altair Engineering vs. BLUESCOPE STEEL | Altair Engineering vs. MYFAIR GOLD P | Altair Engineering vs. Insteel Industries | Altair Engineering vs. SYSTEMAIR AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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