Correlation Between Altair Corp and PPL
Can any of the company-specific risk be diversified away by investing in both Altair Corp and PPL 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 Corp and PPL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Corp and PPL Corporation, you can compare the effects of market volatilities on Altair Corp and PPL 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 Corp with a short position of PPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Corp and PPL.
Diversification Opportunities for Altair Corp and PPL
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and PPL is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Altair Corp and PPL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPL Corporation and Altair Corp 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 Corp are associated (or correlated) with PPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPL Corporation has no effect on the direction of Altair Corp i.e., Altair Corp and PPL go up and down completely randomly.
Pair Corralation between Altair Corp and PPL
Given the investment horizon of 90 days Altair Corp is expected to generate 4.27 times more return on investment than PPL. However, Altair Corp is 4.27 times more volatile than PPL Corporation. It trades about 0.13 of its potential returns per unit of risk. PPL Corporation is currently generating about -0.01 per unit of risk. If you would invest 118,100 in Altair Corp on August 20, 2025 and sell it today you would earn a total of 31,900 from holding Altair Corp or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Altair Corp vs. PPL Corp.
Performance |
| Timeline |
| Altair Corp |
| PPL Corporation |
Altair Corp and PPL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Corp and PPL
The main advantage of trading using opposite Altair Corp and PPL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Corp position performs unexpectedly, PPL 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 PPL will offset losses from the drop in PPL's long position.| Altair Corp vs. China High Speed | Altair Corp vs. TKOLF | Altair Corp vs. Firan Technology Group | Altair Corp vs. Velan Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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