Correlation Between Chicago Atlantic and Altair International

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

By analyzing existing cross correlation between Chicago Atlantic Real and Altair International Corp, you can compare the effects of market volatilities on Chicago Atlantic and Altair International 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 Chicago Atlantic with a short position of Altair International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Altair International.

Diversification Opportunities for Chicago Atlantic and Altair International

0.13

Correlation Coefficient

Chicago Atlantic  Altair International

Average diversification

The 3 months correlation between Chicago and Altair is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real and Altair International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair International Corp and Chicago Atlantic 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 Chicago Atlantic Real are associated (or correlated) with Altair International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair International Corp has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Altair International go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Altair International

Given the investment horizon of 90 days Chicago Atlantic is expected to generate 58.75 times less return on investment than Altair International. But when comparing it to its historical volatility, Chicago Atlantic Real is 15.85 times less risky than Altair International. It trades about 0.02 of its potential returns per unit of risk. Altair International Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Altair International Corp on December 21, 2024 and sell it today you would lose (0.33) from holding Altair International Corp or give up 8.25% of portfolio value over 90 days.

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

Chicago Atlantic Real  vs.  Altair International Corp

Chicago Atlantic Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic Real are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Altair International Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altair International Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Altair International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chicago Atlantic and Altair International

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

The idea behind Chicago Atlantic Real and Altair International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.