Correlation Between DigiAsia Corp and Altair Engineering

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

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

Diversification Opportunities for DigiAsia Corp and Altair Engineering

-0.49

Correlation Coefficient

DigiAsia Corp  Altair Engineering

Very good diversification

The 3 months correlation between DigiAsia and Altair is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and DigiAsia Corp 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 DigiAsia Corp are associated (or correlated) with Altair Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Engineering has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and Altair Engineering go up and down completely randomly.

Pair Corralation between DigiAsia Corp and Altair Engineering

Given the investment horizon of 90 days DigiAsia Corp is expected to under-perform the Altair Engineering. In addition to that, DigiAsia Corp is 82.25 times more volatile than Altair Engineering. It trades about -0.14 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.29 per unit of volatility. If you would invest  10,910  in Altair Engineering on December 29, 2024 and sell it today you would earn a total of  275.00  from holding Altair Engineering or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

DigiAsia Corp  vs.  Altair Engineering

DigiAsia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DigiAsia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Altair Engineering

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altair Engineering is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with DigiAsia Corp and Altair Engineering

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

The idea behind DigiAsia Corp and Altair Engineering 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.