Correlation Between Altair Engineering and PICKN PAY

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

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

Diversification Opportunities for Altair Engineering and PICKN PAY

0.43

Correlation Coefficient

Altair Engineering  PICKN PAY

Very weak diversification

The 3 months correlation between Altair and PICKN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of Altair Engineering i.e., Altair Engineering and PICKN PAY go up and down completely randomly.

Pair Corralation between Altair Engineering and PICKN PAY

Assuming the 90 days horizon Altair Engineering is expected to generate 0.63 times more return on investment than PICKN PAY. However, Altair Engineering is 1.59 times less risky than PICKN PAY. It trades about 0.09 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.03 per unit of risk. If you would invest  4,780  in Altair Engineering on October 11, 2024 and sell it today you would earn a total of  5,720  from holding Altair Engineering or generate 119.67% return on investment over 90 days.

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

Altair Engineering  vs.  PICKN PAY STORES

Altair Engineering

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 16 (%) 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.

PICKN PAY STORES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PICKN PAY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Altair Engineering and PICKN PAY

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

The idea behind Altair Engineering and PICKN PAY STORES 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 Global Correlations module to find global opportunities by holding instruments from different markets.