Correlation Between Altair Engineering and Novanta
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Novanta 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 Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Novanta, you can compare the effects of market volatilities on Altair Engineering and Novanta 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 Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Novanta.
Diversification Opportunities for Altair Engineering and Novanta
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altair and Novanta is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta 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 Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of Altair Engineering i.e., Altair Engineering and Novanta go up and down completely randomly.
Pair Corralation between Altair Engineering and Novanta
Assuming the 90 days horizon Altair Engineering is expected to generate 0.42 times more return on investment than Novanta. However, Altair Engineering is 2.4 times less risky than Novanta. It trades about 0.14 of its potential returns per unit of risk. Novanta is currently generating about -0.11 per unit of risk. If you would invest 9,800 in Altair Engineering on September 14, 2024 and sell it today you would earn a total of 200.00 from holding Altair Engineering or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Novanta
Performance |
| Timeline |
| Altair Engineering |
| Novanta |
Altair Engineering and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Novanta
The main advantage of trading using opposite Altair Engineering and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta's long position.| Altair Engineering vs. Adyen NV | Altair Engineering vs. Superior Plus Corp | Altair Engineering vs. SIVERS SEMICONDUCTORS AB | Altair Engineering vs. Norsk Hydro ASA |
| Novanta vs. INVITATION HOMES DL | Novanta vs. DELTA AIR LINES | Novanta vs. Altair Engineering | Novanta vs. Air New Zealand |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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