Correlation Between Altair Engineering and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Alibaba 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 Alibaba 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 Alibaba Health Information, you can compare the effects of market volatilities on Altair Engineering and Alibaba 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 Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Alibaba Health.
Diversification Opportunities for Altair Engineering and Alibaba Health
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altair and Alibaba is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor 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 Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of Altair Engineering i.e., Altair Engineering and Alibaba Health go up and down completely randomly.
Pair Corralation between Altair Engineering and Alibaba Health
Assuming the 90 days horizon Altair Engineering is expected to generate 0.48 times more return on investment than Alibaba Health. However, Altair Engineering is 2.1 times less risky than Alibaba Health. It trades about 0.08 of its potential returns per unit of risk. Alibaba Health Information is currently generating about -0.01 per unit of risk. If you would invest 5,350 in Altair Engineering on October 25, 2024 and sell it today you would earn a total of 5,250 from holding Altair Engineering or generate 98.13% 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. Alibaba Health Information
Performance |
| Timeline |
| Altair Engineering |
| Alibaba Health Infor |
Altair Engineering and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Alibaba Health
The main advantage of trading using opposite Altair Engineering and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Alibaba 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 Alibaba Health will offset losses from the drop in Alibaba Health's long position.| Altair Engineering vs. BOS BETTER ONLINE | Altair Engineering vs. Lamar Advertising | Altair Engineering vs. TRAVEL LEISURE DL 01 | Altair Engineering vs. Carsales |
| Alibaba Health vs. Meta Financial Group | Alibaba Health vs. Direct Line Insurance | Alibaba Health vs. Erste Group Bank | Alibaba Health vs. CDN IMPERIAL BANK |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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