Correlation Between Altair Engineering and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and ENN Energy 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 ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and ENN Energy Holdings, you can compare the effects of market volatilities on Altair Engineering and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and ENN Energy.
Diversification Opportunities for Altair Engineering and ENN Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and ENN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Altair Engineering i.e., Altair Engineering and ENN Energy go up and down completely randomly.
Pair Corralation between Altair Engineering and ENN Energy
Assuming the 90 days horizon Altair Engineering is expected to generate 0.39 times more return on investment than ENN Energy. However, Altair Engineering is 2.58 times less risky than ENN Energy. It trades about 0.51 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.07 per unit of risk. If you would invest 10,100 in Altair Engineering on October 14, 2024 and sell it today you would earn a total of 600.00 from holding Altair Engineering or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. ENN Energy Holdings
Performance |
| Timeline |
| Altair Engineering |
| ENN Energy Holdings |
Altair Engineering and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and ENN Energy
The main advantage of trading using opposite Altair Engineering and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| Altair Engineering vs. SENECA FOODS A | Altair Engineering vs. GWILLI FOOD | Altair Engineering vs. Keck Seng Investments | Altair Engineering vs. MidCap Financial Investment |
| ENN Energy vs. Siamgas And Petrochemicals | ENN Energy vs. Altair Engineering | ENN Energy vs. Mitsubishi Gas Chemical | ENN Energy vs. Alaska Air Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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