Correlation Between Altair Engineering and Apple
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Apple Inc, you can compare the effects of market volatilities on Altair Engineering and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Apple.
Diversification Opportunities for Altair Engineering and Apple
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and Apple is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Altair Engineering i.e., Altair Engineering and Apple go up and down completely randomly.
Pair Corralation between Altair Engineering and Apple
Assuming the 90 days horizon Altair Engineering is expected to generate 1.02 times less return on investment than Apple. In addition to that, Altair Engineering is 1.47 times more volatile than Apple Inc. It trades about 0.08 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.12 per unit of volatility. If you would invest 17,637 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 4,498 from holding Apple Inc or generate 25.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Apple Inc
Performance |
| Timeline |
| Altair Engineering |
| Apple Inc |
Altair Engineering and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Apple
The main advantage of trading using opposite Altair Engineering and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Altair Engineering vs. Summit Hotel Properties | Altair Engineering vs. INTERCONT HOTELS | Altair Engineering vs. Meli Hotels International | Altair Engineering vs. COVIVIO HOTELS INH |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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