Correlation Between Altair Engineering and Ströer SE

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

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

Diversification Opportunities for Altair Engineering and Ströer SE

-0.5

Correlation Coefficient

Altair Engineering  Ströer SE

Very good diversification

The 3 months correlation between Altair and Ströer is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ströer SE 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 Ströer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ströer SE has no effect on the direction of Altair Engineering i.e., Altair Engineering and Ströer SE go up and down completely randomly.

Pair Corralation between Altair Engineering and Ströer SE

Assuming the 90 days horizon Altair Engineering is expected to generate 8.8 times less return on investment than Ströer SE. But when comparing it to its historical volatility, Altair Engineering is 7.19 times less risky than Ströer SE. It trades about 0.18 of its potential returns per unit of risk. Strer SE Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  4,624  in Strer SE Co on October 23, 2024 and sell it today you would earn a total of  821.00  from holding Strer SE Co or generate 17.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Altair Engineering  vs.  Strer SE Co

Altair Engineering

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Altair Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ströer SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strer SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ströer SE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Altair Engineering and Ströer SE

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

The idea behind Altair Engineering and Strer SE Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.