Correlation Between United Breweries and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both United Breweries 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 United Breweries and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Breweries Co and Altair Engineering, you can compare the effects of market volatilities on United Breweries 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 United Breweries with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Altair Engineering.
Diversification Opportunities for United Breweries and Altair Engineering
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Altair is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and United Breweries 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 United Breweries Co 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 United Breweries i.e., United Breweries and Altair Engineering go up and down completely randomly.
Pair Corralation between United Breweries and Altair Engineering
Assuming the 90 days trading horizon United Breweries Co is expected to under-perform the Altair Engineering. But the stock apears to be less risky and, when comparing its historical volatility, United Breweries Co is 1.24 times less risky than Altair Engineering. The stock trades about 0.0 of its potential returns per unit of risk. The Altair Engineering is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Altair Engineering on September 14, 2024 and sell it today you would earn a total of 3,300 from holding Altair Engineering or generate 49.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. Altair Engineering
Performance |
| Timeline |
| United Breweries |
| Altair Engineering |
United Breweries and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Altair Engineering
The main advantage of trading using opposite United Breweries and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries 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.| United Breweries vs. National Retail Properties | United Breweries vs. EBRO FOODS | United Breweries vs. Cal Maine Foods | United Breweries vs. MARKET VECTR RETAIL |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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