Correlation Between Stantec and Altus Group
Can any of the company-specific risk be diversified away by investing in both Stantec and Altus Group 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 Stantec and Altus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stantec and Altus Group Limited, you can compare the effects of market volatilities on Stantec and Altus Group 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 Stantec with a short position of Altus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stantec and Altus Group.
Diversification Opportunities for Stantec and Altus Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stantec and Altus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stantec and Altus Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Group Limited and Stantec 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 Stantec are associated (or correlated) with Altus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Group Limited has no effect on the direction of Stantec i.e., Stantec and Altus Group go up and down completely randomly.
Pair Corralation between Stantec and Altus Group
Assuming the 90 days trading horizon Stantec is expected to generate 4.92 times less return on investment than Altus Group. But when comparing it to its historical volatility, Stantec is 1.18 times less risky than Altus Group. It trades about 0.02 of its potential returns per unit of risk. Altus Group Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,816 in Altus Group Limited on September 24, 2024 and sell it today you would earn a total of 805.00 from holding Altus Group Limited or generate 16.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stantec vs. Altus Group Limited
Performance |
| Timeline |
| Stantec |
| Altus Group Limited |
Stantec and Altus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stantec and Altus Group
The main advantage of trading using opposite Stantec and Altus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stantec position performs unexpectedly, Altus Group 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 Altus Group will offset losses from the drop in Altus Group's long position.| Stantec vs. Toromont Industries | Stantec vs. WSP Global | Stantec vs. Ritchie Bros Auctioneers | Stantec vs. Stella Jones |
| Altus Group vs. Colliers International Group | Altus Group vs. CCL Industries | Altus Group vs. Ritchie Bros Auctioneers | Altus Group vs. Stantec |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |