Correlation Between Altair Engineering and Knowles
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Knowles 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 Knowles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Knowles, you can compare the effects of market volatilities on Altair Engineering and Knowles 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 Knowles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Knowles.
Diversification Opportunities for Altair Engineering and Knowles
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and Knowles is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Knowles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles 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 Knowles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles has no effect on the direction of Altair Engineering i.e., Altair Engineering and Knowles go up and down completely randomly.
Pair Corralation between Altair Engineering and Knowles
Assuming the 90 days horizon Altair Engineering is expected to generate 0.33 times more return on investment than Knowles. However, Altair Engineering is 3.05 times less risky than Knowles. It trades about 0.0 of its potential returns per unit of risk. Knowles is currently generating about -0.19 per unit of risk. If you would invest 10,600 in Altair Engineering on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Altair Engineering or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Altair Engineering vs. Knowles
Performance |
| Timeline |
| Altair Engineering |
| Knowles |
Altair Engineering and Knowles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Knowles
The main advantage of trading using opposite Altair Engineering and Knowles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Knowles 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 Knowles will offset losses from the drop in Knowles' long position.| Altair Engineering vs. Microsoft | Altair Engineering vs. Adobe Inc | Altair Engineering vs. ADYEN NV UNSPADR001 | Altair Engineering vs. Square Inc |
| Knowles vs. Fast Retailing Co | Knowles vs. Ryanair Holdings plc | Knowles vs. RYANAIR HLDGS ADR | Knowles vs. ALERION CLEANPOWER |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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