Correlation Between Altair International and Progressive Planet

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

Diversification Opportunities for Altair International and Progressive Planet

-0.52

Correlation Coefficient

Altair International  Progressive Planet

Excellent diversification

The 3 months correlation between Altair and Progressive is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Altair International Corp and Progressive Planet Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Planet 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 Progressive Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Planet has no effect on the direction of Altair International i.e., Altair International and Progressive Planet go up and down completely randomly.

Pair Corralation between Altair International and Progressive Planet

Given the investment horizon of 90 days Altair International Corp is expected to generate 2.24 times more return on investment than Progressive Planet. However, Altair International is 2.24 times more volatile than Progressive Planet Solutions. It trades about 0.08 of its potential returns per unit of risk. Progressive Planet Solutions is currently generating about 0.05 per unit of risk. If you would invest  2.80  in Altair International Corp on September 27, 2024 and sell it today you would earn a total of  0.64  from holding Altair International Corp or generate 22.86% return on investment over 90 days.

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

Altair International Corp  vs.  Progressive Planet Solutions

Altair International Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altair International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Progressive Planet

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Altair International and Progressive Planet

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

The idea behind Altair International Corp and Progressive Planet Solutions 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.