Correlation Between Ceres Power and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Ceres Power 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 Ceres Power and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceres Power Holdings and Altair Engineering, you can compare the effects of market volatilities on Ceres Power 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 Ceres Power with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceres Power and Altair Engineering.
Diversification Opportunities for Ceres Power and Altair Engineering
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceres and Altair is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ceres Power Holdings and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Ceres Power 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 Ceres Power Holdings 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 Ceres Power i.e., Ceres Power and Altair Engineering go up and down completely randomly.
Pair Corralation between Ceres Power and Altair Engineering
Assuming the 90 days trading horizon Ceres Power Holdings is expected to under-perform the Altair Engineering. In addition to that, Ceres Power is 5.27 times more volatile than Altair Engineering. It trades about -0.02 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.17 per unit of volatility. If you would invest 9,750 in Altair Engineering on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Altair Engineering or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceres Power Holdings vs. Altair Engineering
Performance |
| Timeline |
| Ceres Power Holdings |
| Altair Engineering |
Ceres Power and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceres Power and Altair Engineering
The main advantage of trading using opposite Ceres Power and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceres Power 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.| Ceres Power vs. Entravision Communications | Ceres Power vs. MICRONIC MYDATA | Ceres Power vs. Automatic Data Processing | Ceres Power vs. ScanSource |
| Altair Engineering vs. Adyen NV | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. SIVERS SEMICONDUCTORS AB | Altair Engineering vs. Norsk Hydro ASA |
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 Correlations module to find global opportunities by holding instruments from different markets.
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