Correlation Between Altair International and Stallion Discoveries

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Can any of the company-specific risk be diversified away by investing in both Altair International and Stallion Discoveries 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 Stallion Discoveries 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 Stallion Discoveries Corp, you can compare the effects of market volatilities on Altair International and Stallion Discoveries 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 Stallion Discoveries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair International and Stallion Discoveries.

Diversification Opportunities for Altair International and Stallion Discoveries

AltairStallionDiversified AwayAltairStallionDiversified Away100%
-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Altair and Stallion is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Altair International Corp and Stallion Discoveries Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stallion Discoveries Corp 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 Stallion Discoveries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stallion Discoveries Corp has no effect on the direction of Altair International i.e., Altair International and Stallion Discoveries go up and down completely randomly.

Pair Corralation between Altair International and Stallion Discoveries

Given the investment horizon of 90 days Altair International Corp is expected to generate 1.44 times more return on investment than Stallion Discoveries. However, Altair International is 1.44 times more volatile than Stallion Discoveries Corp. It trades about 0.04 of its potential returns per unit of risk. Stallion Discoveries Corp is currently generating about 0.01 per unit of risk. If you would invest  5.80  in Altair International Corp on November 22, 2024 and sell it today you would lose (1.10) from holding Altair International Corp or give up 18.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Altair International Corp  vs.  Stallion Discoveries Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -2002040
JavaScript chart by amCharts 3.21.15ATAO STLNF
       Timeline  
Altair International Corp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Altair International Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Altair International displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0250.030.0350.040.0450.050.0550.060.065
Stallion Discoveries Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Stallion Discoveries Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Stallion Discoveries is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0150.020.0250.030.0350.040.045

Altair International and Stallion Discoveries Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-46.96-35.17-23.38-11.590.0911.8423.8935.9447.98 0.00200.00250.00300.0035
JavaScript chart by amCharts 3.21.15ATAO STLNF
       Returns  

Pair Trading with Altair International and Stallion Discoveries

The main advantage of trading using opposite Altair International and Stallion Discoveries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair International position performs unexpectedly, Stallion Discoveries 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 Stallion Discoveries will offset losses from the drop in Stallion Discoveries' long position.
The idea behind Altair International Corp and Stallion Discoveries Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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