Correlation Between Tradegate and Altair Engineering

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

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

Diversification Opportunities for Tradegate and Altair Engineering

0.03

Correlation Coefficient

Tradegate  Altair Engineering

Significant diversification

The 3 months correlation between Tradegate and Altair is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Altair Engineering go up and down completely randomly.

Pair Corralation between Tradegate and Altair Engineering

Assuming the 90 days horizon Tradegate is expected to generate 90.9 times less return on investment than Altair Engineering. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 1.31 times less risky than Altair Engineering. It trades about 0.0 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  10,100  in Altair Engineering on September 23, 2024 and sell it today you would earn a total of  200.00  from holding Altair Engineering or generate 1.98% return on investment over 90 days.

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

Tradegate AG Wertpapierhandels  vs.  Altair Engineering

Tradegate AG Wertpap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Altair Engineering

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 14 (%) 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.

Pair Trading with Tradegate and Altair Engineering

The main advantage of trading using opposite Tradegate and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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 Tradegate AG Wertpapierhandelsbank 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.