Correlation Between QURATE RETAIL and Altair Engineering

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

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

Diversification Opportunities for QURATE RETAIL and Altair Engineering

-0.26

Correlation Coefficient

QURATE RETAIL  Altair Engineering

Very good diversification

The 3 months correlation between QURATE and Altair is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding QURATE RETAIL INC and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and QURATE RETAIL 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 QURATE RETAIL INC 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 QURATE RETAIL i.e., QURATE RETAIL and Altair Engineering go up and down completely randomly.

Pair Corralation between QURATE RETAIL and Altair Engineering

Assuming the 90 days trading horizon QURATE RETAIL INC is expected to generate 45.46 times more return on investment than Altair Engineering. However, QURATE RETAIL is 45.46 times more volatile than Altair Engineering. It trades about 0.11 of its potential returns per unit of risk. Altair Engineering is currently generating about -0.04 per unit of risk. If you would invest  264.00  in QURATE RETAIL INC on December 20, 2024 and sell it today you would earn a total of  226.00  from holding QURATE RETAIL INC or generate 85.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

QURATE RETAIL INC  vs.  Altair Engineering

QURATE RETAIL INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QURATE RETAIL INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QURATE RETAIL reported solid returns over the last few months and may actually be approaching a breakup point.

Altair Engineering

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altair Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altair Engineering is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with QURATE RETAIL and Altair Engineering

The main advantage of trading using opposite QURATE RETAIL and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QURATE RETAIL 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.

The idea behind QURATE RETAIL INC and Altair Engineering 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.