Correlation Between BROADWIND ENRGY and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and Altair Engineering 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 BROADWIND ENRGY and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Altair Engineering, you can compare the effects of market volatilities on BROADWIND ENRGY and Altair Engineering 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 BROADWIND ENRGY with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Altair Engineering.
Diversification Opportunities for BROADWIND ENRGY and Altair Engineering
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BROADWIND and Altair is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with Altair Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Engineering has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and Altair Engineering go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Altair Engineering
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to generate 5.56 times more return on investment than Altair Engineering. However, BROADWIND ENRGY is 5.56 times more volatile than Altair Engineering. It trades about 0.13 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.51 per unit of risk. If you would invest 168.00 in BROADWIND ENRGY on October 12, 2024 and sell it today you would earn a total of 13.00 from holding BROADWIND ENRGY or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Altair Engineering
Performance |
| Timeline |
| BROADWIND ENRGY |
| Altair Engineering |
BROADWIND ENRGY and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Altair Engineering
The main advantage of trading using opposite BROADWIND ENRGY and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, Altair Engineering 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 Altair Engineering will offset losses from the drop in Altair Engineering's long position.| BROADWIND ENRGY vs. Nok Airlines PCL | BROADWIND ENRGY vs. InterContinental Hotels Group | BROADWIND ENRGY vs. Singapore Airlines Limited | BROADWIND ENRGY vs. Xenia Hotels Resorts |
| Altair Engineering vs. Gaztransport Technigaz SA | Altair Engineering vs. Tyson Foods | Altair Engineering vs. BROADWIND ENRGY | Altair Engineering vs. MTY Food 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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