Correlation Between Altair Engineering and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Titan Machinery 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 Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Titan Machinery, you can compare the effects of market volatilities on Altair Engineering and Titan Machinery 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 Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Titan Machinery.
Diversification Opportunities for Altair Engineering and Titan Machinery
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altair and Titan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Altair Engineering i.e., Altair Engineering and Titan Machinery go up and down completely randomly.
Pair Corralation between Altair Engineering and Titan Machinery
Assuming the 90 days horizon Altair Engineering is expected to generate 0.59 times more return on investment than Titan Machinery. However, Altair Engineering is 1.7 times less risky than Titan Machinery. It trades about 0.08 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.03 per unit of risk. If you would invest 5,350 in Altair Engineering on November 7, 2024 and sell it today you would earn a total of 5,250 from holding Altair Engineering or generate 98.13% 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. Titan Machinery
Performance |
| Timeline |
| Altair Engineering |
| Titan Machinery |
Altair Engineering and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Titan Machinery
The main advantage of trading using opposite Altair Engineering and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.| Altair Engineering vs. Electronic Arts | Altair Engineering vs. KENEDIX OFFICE INV | Altair Engineering vs. STORE ELECTRONIC | Altair Engineering vs. TT Electronics PLC |
| Titan Machinery vs. PennantPark Investment | Titan Machinery vs. ADRIATIC METALS LS 013355 | Titan Machinery vs. HK Electric Investments | Titan Machinery vs. GRIFFIN MINING LTD |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |