Correlation Between THAI BEVERAGE and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE 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 THAI BEVERAGE and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Altair Engineering, you can compare the effects of market volatilities on THAI BEVERAGE 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 THAI BEVERAGE with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Altair Engineering.
Diversification Opportunities for THAI BEVERAGE and Altair Engineering
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THAI and Altair is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE i.e., THAI BEVERAGE and Altair Engineering go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Altair Engineering
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 2.41 times more return on investment than Altair Engineering. However, THAI BEVERAGE is 2.41 times more volatile than Altair Engineering. It trades about 0.08 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.08 per unit of risk. If you would invest 18.00 in THAI BEVERAGE on September 14, 2024 and sell it today you would earn a total of 20.00 from holding THAI BEVERAGE or generate 111.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Altair Engineering
Performance |
| Timeline |
| THAI BEVERAGE |
| Altair Engineering |
THAI BEVERAGE and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Altair Engineering
The main advantage of trading using opposite THAI BEVERAGE and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE 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.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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