Correlation Between Altair Engineering and Sanyo Chemical
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Sanyo Chemical 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 Sanyo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Sanyo Chemical Industries, you can compare the effects of market volatilities on Altair Engineering and Sanyo Chemical 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 Sanyo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Sanyo Chemical.
Diversification Opportunities for Altair Engineering and Sanyo Chemical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altair and Sanyo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Sanyo Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Chemical Industries 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 Sanyo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Chemical Industries has no effect on the direction of Altair Engineering i.e., Altair Engineering and Sanyo Chemical go up and down completely randomly.
Pair Corralation between Altair Engineering and Sanyo Chemical
Assuming the 90 days horizon Altair Engineering is expected to generate 1.86 times more return on investment than Sanyo Chemical. However, Altair Engineering is 1.86 times more volatile than Sanyo Chemical Industries. It trades about 0.22 of its potential returns per unit of risk. Sanyo Chemical Industries is currently generating about -0.09 per unit of risk. If you would invest 8,450 in Altair Engineering on September 5, 2024 and sell it today you would earn a total of 1,550 from holding Altair Engineering or generate 18.34% 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. Sanyo Chemical Industries
Performance |
| Timeline |
| Altair Engineering |
| Sanyo Chemical Industries |
Altair Engineering and Sanyo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Sanyo Chemical
The main advantage of trading using opposite Altair Engineering and Sanyo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Sanyo Chemical 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 Sanyo Chemical will offset losses from the drop in Sanyo Chemical's long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. VeriSign | Altair Engineering vs. Palantir Technologies |
| Sanyo Chemical vs. COMMERCIAL VEHICLE | Sanyo Chemical vs. Altair Engineering | Sanyo Chemical vs. NORWEGIAN AIR SHUT | Sanyo Chemical vs. FORWARD AIR P |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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