Correlation Between Altair International and Cobalt Blue

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

Diversification Opportunities for Altair International and Cobalt Blue

0.11

Correlation Coefficient

Altair International  Cobalt Blue

Average diversification

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

Pair Corralation between Altair International and Cobalt Blue

Given the investment horizon of 90 days Altair International is expected to generate 18.18 times less return on investment than Cobalt Blue. In addition to that, Altair International is 1.01 times more volatile than Cobalt Blue Holdings. It trades about 0.0 of its total potential returns per unit of risk. Cobalt Blue Holdings is currently generating about 0.05 per unit of volatility. If you would invest  5.01  in Cobalt Blue Holdings on September 22, 2024 and sell it today you would lose (0.76) from holding Cobalt Blue Holdings or give up 15.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Altair International Corp  vs.  Cobalt Blue Holdings

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 very healthy basic indicators, Altair International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cobalt Blue Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cobalt Blue Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Cobalt Blue reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altair International and Cobalt Blue

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

The idea behind Altair International Corp and Cobalt Blue 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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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.