Correlation Between Inflection Point and Altair Engineering

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

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

Diversification Opportunities for Inflection Point and Altair Engineering

-0.32

Correlation Coefficient

Inflection Point  Altair Engineering

Very good diversification

The 3 months correlation between Inflection and Altair is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Altair Engineering go up and down completely randomly.

Pair Corralation between Inflection Point and Altair Engineering

Assuming the 90 days horizon Inflection Point Acquisition is expected to under-perform the Altair Engineering. In addition to that, Inflection Point is 30.47 times more volatile than Altair Engineering. It trades about -0.07 of its total potential returns per unit of risk. Altair Engineering is currently generating about 0.31 per unit of volatility. If you would invest  10,871  in Altair Engineering on December 22, 2024 and sell it today you would earn a total of  304.00  from holding Altair Engineering or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Inflection Point Acquisition  vs.  Altair Engineering

Inflection Point Acq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inflection Point Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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 24 (%) 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 Inflection Point and Altair Engineering

The main advantage of trading using opposite Inflection Point and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.