Correlation Between Altair Engineering and Uni-President China

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Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Uni-President China 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 Uni-President China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Uni-President China Holdings, you can compare the effects of market volatilities on Altair Engineering and Uni-President China 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 Uni-President China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Uni-President China.

Diversification Opportunities for Altair Engineering and Uni-President China

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Altair and Uni-President is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Uni-President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni-President China 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 Uni-President China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni-President China has no effect on the direction of Altair Engineering i.e., Altair Engineering and Uni-President China go up and down completely randomly.

Pair Corralation between Altair Engineering and Uni-President China

Given the investment horizon of 90 days Altair Engineering is expected to under-perform the Uni-President China. In addition to that, Altair Engineering is 3.11 times more volatile than Uni-President China Holdings. It trades about -0.05 of its total potential returns per unit of risk. Uni-President China Holdings is currently generating about -0.13 per unit of volatility. If you would invest  82.00  in Uni-President China Holdings on September 11, 2022 and sell it today you would lose (5.00)  from holding Uni-President China Holdings or give up 6.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Altair Engineering  vs.  Uni-President China Holdings

 Performance (%) 
       Timeline  
Altair Engineering 
Altair Performance
0 of 100
Over the last 90 days Altair Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Altair Price Channel

Uni-President China 
Uni-President Performance
0 of 100
Over the last 90 days Uni-President China Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Uni-President China is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Uni-President Price Channel

Altair Engineering and Uni-President China Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altair Engineering and Uni-President China

The main advantage of trading using opposite Altair Engineering and Uni-President China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Uni-President China 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 Uni-President China will offset losses from the drop in Uni-President China's long position.
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The idea behind Altair Engineering and Uni-President China Holdings 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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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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