Correlation Between Altair International and New Energy
Can any of the company-specific risk be diversified away by investing in both Altair International and New Energy 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 International and New Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair International Corp and New Energy Metals, you can compare the effects of market volatilities on Altair International and New Energy 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 International with a short position of New Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair International and New Energy.
Diversification Opportunities for Altair International and New Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altair and New is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Altair International Corp and New Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Energy Metals and Altair International 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 International Corp are associated (or correlated) with New Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Energy Metals has no effect on the direction of Altair International i.e., Altair International and New Energy go up and down completely randomly.
Pair Corralation between Altair International and New Energy
Given the investment horizon of 90 days Altair International is expected to generate 20.36 times less return on investment than New Energy. But when comparing it to its historical volatility, Altair International Corp is 8.93 times less risky than New Energy. It trades about 0.04 of its potential returns per unit of risk. New Energy Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31.00 in New Energy Metals on November 22, 2024 and sell it today you would lose (28.23) from holding New Energy Metals or give up 91.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.31% |
Values | Daily Returns |
Altair International Corp vs. New Energy Metals
Performance |
Timeline |
Altair International Corp |
New Energy Metals |
Altair International and New Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Altair International and New Energy
The main advantage of trading using opposite Altair International and New Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair International position performs unexpectedly, New Energy 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 New Energy will offset losses from the drop in New Energy's long position.Altair International vs. Atco Mining | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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