Correlation Between Altair Engineering and ADRIATIC METALS

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

By analyzing existing cross correlation between Altair Engineering and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Altair Engineering and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and ADRIATIC METALS.

Diversification Opportunities for Altair Engineering and ADRIATIC METALS

0.23

Correlation Coefficient

Altair Engineering  ADRIATIC METALS

Modest diversification

The 3 months correlation between Altair and ADRIATIC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Altair Engineering i.e., Altair Engineering and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between Altair Engineering and ADRIATIC METALS

Assuming the 90 days horizon Altair Engineering is expected to generate 0.24 times more return on investment than ADRIATIC METALS. However, Altair Engineering is 4.1 times less risky than ADRIATIC METALS. It trades about 0.39 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about -0.04 per unit of risk. If you would invest  9,500  in Altair Engineering on October 6, 2024 and sell it today you would earn a total of  1,100  from holding Altair Engineering or generate 11.58% return on investment over 90 days.

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

Altair Engineering  vs.  ADRIATIC METALS LS 013355

Altair Engineering

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altair Engineering reported solid returns over the last few months and may actually be approaching a breakup point.

ADRIATIC METALS LS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ADRIATIC METALS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Altair Engineering and ADRIATIC METALS

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

The idea behind Altair Engineering and ADRIATIC METALS LS 013355 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.