Correlation Between Altair International and Global Helium
Can any of the company-specific risk be diversified away by investing in both Altair International and Global Helium 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 International and Global Helium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair International Corp and Global Helium Corp, you can compare the effects of market volatilities on Altair International and Global Helium 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 International with a short position of Global Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair International and Global Helium.
Diversification Opportunities for Altair International and Global Helium
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altair and Global is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Altair International Corp and Global Helium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Helium Corp and Altair International 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 International Corp are associated (or correlated) with Global Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Helium Corp has no effect on the direction of Altair International i.e., Altair International and Global Helium go up and down completely randomly.
Pair Corralation between Altair International and Global Helium
Given the investment horizon of 90 days Altair International Corp is expected to generate 1.1 times more return on investment than Global Helium. However, Altair International is 1.1 times more volatile than Global Helium Corp. It trades about 0.06 of its potential returns per unit of risk. Global Helium Corp is currently generating about 0.03 per unit of risk. If you would invest 7.00 in Altair International Corp on November 3, 2024 and sell it today you would lose (3.01) from holding Altair International Corp or give up 43.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair International Corp vs. Global Helium Corp
Performance |
| Timeline |
| Altair International Corp |
| Global Helium Corp |
Altair International and Global Helium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair International and Global Helium
The main advantage of trading using opposite Altair International and Global Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair International position performs unexpectedly, Global Helium 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 Global Helium will offset losses from the drop in Global Helium's long position.| Altair International vs. Atco Mining | Altair International vs. Bitterroot Resources | Altair International vs. Avarone Metals | Altair International vs. Huntsman Exploration |
| Global Helium vs. Silver X Mining | Global Helium vs. Amarc Resources | Global Helium vs. Argosy Minerals Limited | Global Helium vs. Altura Mining Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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