Correlation Between Altair Engineering and United Parks
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and United Parks Resorts, you can compare the effects of market volatilities on Altair Engineering and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and United Parks.
Diversification Opportunities for Altair Engineering and United Parks
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and United is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Altair Engineering i.e., Altair Engineering and United Parks go up and down completely randomly.
Pair Corralation between Altair Engineering and United Parks
Given the investment horizon of 90 days Altair Engineering is expected to generate 0.37 times more return on investment than United Parks. However, Altair Engineering is 2.7 times less risky than United Parks. It trades about 0.24 of its potential returns per unit of risk. United Parks Resorts is currently generating about 0.08 per unit of risk. If you would invest 10,683 in Altair Engineering on October 9, 2024 and sell it today you would earn a total of 308.00 from holding Altair Engineering or generate 2.88% 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. United Parks Resorts
Performance |
| Timeline |
| Altair Engineering |
| United Parks Resorts |
Altair Engineering and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and United Parks
The main advantage of trading using opposite Altair Engineering and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Altair Engineering vs. Global Blue Group | Altair Engineering vs. EverCommerce | Altair Engineering vs. CSG Systems International | Altair Engineering vs. Consensus Cloud Solutions |
| United Parks vs. Flutter Entertainment plc | United Parks vs. Hollywood Intermediate | United Parks vs. Cardinal Health | United Parks vs. Teleflex Incorporated |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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