Correlation Between Samsung Electronics and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Altair Engineering, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Altair Engineering.
Diversification Opportunities for Samsung Electronics and Altair Engineering
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Altair is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics i.e., Samsung Electronics and Altair Engineering go up and down completely randomly.
Pair Corralation between Samsung Electronics and Altair Engineering
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Altair Engineering. In addition to that, Samsung Electronics is 2.38 times more volatile than Altair Engineering. It trades about -0.06 of its total potential returns per unit of risk. Altair Engineering is currently generating about -0.01 per unit of volatility. If you would invest 10,000 in Altair Engineering on August 31, 2024 and sell it today you would lose (50.00) from holding Altair Engineering or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Altair Engineering
Performance |
| Timeline |
| Samsung Electronics |
| Altair Engineering |
Samsung Electronics and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Altair Engineering
The main advantage of trading using opposite Samsung Electronics and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Fukuyama Transporting Co | Samsung Electronics vs. Transportadora de Gas | Samsung Electronics vs. Gold Road Resources | Samsung Electronics vs. Japan Post Insurance |
| Altair Engineering vs. Microsoft | Altair Engineering vs. VeriSign | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. NMI Holdings |
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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