Correlation Between Altair Engineering and Gentex

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

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

Diversification Opportunities for Altair Engineering and Gentex

-0.15

Correlation Coefficient

Altair Engineering  Gentex

Good diversification

The 3 months correlation between Altair and Gentex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Altair Engineering i.e., Altair Engineering and Gentex go up and down completely randomly.

Pair Corralation between Altair Engineering and Gentex

Assuming the 90 days horizon Altair Engineering is expected to generate 0.68 times more return on investment than Gentex. However, Altair Engineering is 1.47 times less risky than Gentex. It trades about 0.17 of its potential returns per unit of risk. Gentex is currently generating about -0.22 per unit of risk. If you would invest  10,400  in Altair Engineering on October 24, 2024 and sell it today you would earn a total of  200.00  from holding Altair Engineering or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Altair Engineering  vs.  Gentex

Altair Engineering

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altair Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gentex is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Altair Engineering and Gentex

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

The idea behind Altair Engineering and Gentex 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.