Correlation Between Altair Engineering and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and MACOM Technology 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 MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and MACOM Technology Solutions, you can compare the effects of market volatilities on Altair Engineering and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and MACOM Technology.
Diversification Opportunities for Altair Engineering and MACOM Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altair and MACOM is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Altair Engineering i.e., Altair Engineering and MACOM Technology go up and down completely randomly.
Pair Corralation between Altair Engineering and MACOM Technology
Assuming the 90 days horizon Altair Engineering is expected to generate 0.33 times more return on investment than MACOM Technology. However, Altair Engineering is 3.04 times less risky than MACOM Technology. It trades about 0.51 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.07 per unit of risk. If you would invest 10,000 in Altair Engineering on October 11, 2024 and sell it today you would earn a total of 600.00 from holding Altair Engineering or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Altair Engineering vs. MACOM Technology Solutions
Performance |
| Timeline |
| Altair Engineering |
| MACOM Technology Sol |
Altair Engineering and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and MACOM Technology
The main advantage of trading using opposite Altair Engineering and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| Altair Engineering vs. Gaztransport Technigaz SA | Altair Engineering vs. Tyson Foods | Altair Engineering vs. BROADWIND ENRGY | Altair Engineering vs. MTY Food Group |
| MACOM Technology vs. Perseus Mining Limited | MACOM Technology vs. Calibre Mining Corp | MACOM Technology vs. MAGNUM MINING EXP | MACOM Technology vs. Altair Engineering |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |