Correlation Between SLR Investment and Altair Engineering
Can any of the company-specific risk be diversified away by investing in both SLR Investment 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 SLR Investment and Altair Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Altair Engineering, you can compare the effects of market volatilities on SLR Investment 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 SLR Investment with a short position of Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Altair Engineering.
Diversification Opportunities for SLR Investment and Altair Engineering
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SLR and Altair is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and SLR Investment 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 SLR Investment Corp 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 SLR Investment i.e., SLR Investment and Altair Engineering go up and down completely randomly.
Pair Corralation between SLR Investment and Altair Engineering
Assuming the 90 days horizon SLR Investment is expected to generate 1.56 times less return on investment than Altair Engineering. In addition to that, SLR Investment is 1.77 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 0.21 per unit of volatility. If you would invest 10,000 in Altair Engineering on October 29, 2024 and sell it today you would earn a total of 500.00 from holding Altair Engineering or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.44% |
| Values | Daily Returns |
SLR Investment Corp vs. Altair Engineering
Performance |
| Timeline |
| SLR Investment Corp |
| Altair Engineering |
SLR Investment and Altair Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Altair Engineering
The main advantage of trading using opposite SLR Investment and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment 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.| SLR Investment vs. LOANDEPOT INC A | SLR Investment vs. ALBIS LEASING AG | SLR Investment vs. Cardinal Health | SLR Investment vs. RCI Hospitality Holdings |
| Altair Engineering vs. PENN NATL GAMING | Altair Engineering vs. Games Workshop Group | Altair Engineering vs. FRACTAL GAMING GROUP | Altair Engineering vs. GameStop Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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