Correlation Between Keck Seng and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Keck Seng 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 Keck Seng and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Investments and Altair Engineering, you can compare the effects of market volatilities on Keck Seng 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 Keck Seng with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Altair Engineering.
Diversification Opportunities for Keck Seng and Altair Engineering
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keck and Altair is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Keck Seng 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 Keck Seng Investments 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 Keck Seng i.e., Keck Seng and Altair Engineering go up and down completely randomly.
Pair Corralation between Keck Seng and Altair Engineering
Assuming the 90 days horizon Keck Seng is expected to generate 1.06 times less return on investment than Altair Engineering. In addition to that, Keck Seng is 6.18 times more volatile than Altair Engineering. It trades about 0.08 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.51 per unit of volatility. If you would invest 10,100 in Altair Engineering on October 14, 2024 and sell it today you would earn a total of 600.00 from holding Altair Engineering or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. Altair Engineering
Performance |
| Timeline |
| Keck Seng Investments |
| Altair Engineering |
Keck Seng and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and Altair Engineering
The main advantage of trading using opposite Keck Seng and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng 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.| Keck Seng vs. Marriott International | Keck Seng vs. Hyatt Hotels | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. INTERCONT HOTELS |
| Altair Engineering vs. SENECA FOODS A | Altair Engineering vs. GWILLI FOOD | Altair Engineering vs. Keck Seng Investments | Altair Engineering vs. MidCap Financial Investment |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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