Correlation Between Altair Engineering and Hamilton Insurance

Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Hamilton Insurance 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 Altair Engineering and Hamilton Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altair Engineering and Hamilton Insurance Group,, you can compare the effects of market volatilities on Altair Engineering and Hamilton Insurance 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 Altair Engineering with a short position of Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Hamilton Insurance.

Diversification Opportunities for Altair Engineering and Hamilton Insurance

0.24

Correlation Coefficient

Altair Engineering  Hamilton Insurance

Modest diversification

The 3 months correlation between Altair and Hamilton is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Altair Engineering 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 Altair Engineering are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Altair Engineering i.e., Altair Engineering and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Altair Engineering and Hamilton Insurance

Given the investment horizon of 90 days Altair Engineering is expected to generate 0.09 times more return on investment than Hamilton Insurance. However, Altair Engineering is 11.06 times less risky than Hamilton Insurance. It trades about 0.41 of its potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.02 per unit of risk. If you would invest  10,910  in Altair Engineering on October 26, 2024 and sell it today you would earn a total of  129.50  from holding Altair Engineering or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Altair Engineering  vs.  Hamilton Insurance Group,

Altair Engineering

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Altair Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hamilton Insurance Group,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Altair Engineering and Hamilton Insurance

The main advantage of trading using opposite Altair Engineering and Hamilton Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Hamilton Insurance 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 Hamilton Insurance will offset losses from the drop in Hamilton Insurance's long position.

The idea behind Altair Engineering and Hamilton Insurance Group, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.