Correlation Between Altair Engineering and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and EHEALTH 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 EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and EHEALTH, you can compare the effects of market volatilities on Altair Engineering and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and EHEALTH.
Diversification Opportunities for Altair Engineering and EHEALTH
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and EHEALTH is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Altair Engineering i.e., Altair Engineering and EHEALTH go up and down completely randomly.
Pair Corralation between Altair Engineering and EHEALTH
Assuming the 90 days horizon Altair Engineering is expected to generate 11.03 times less return on investment than EHEALTH. But when comparing it to its historical volatility, Altair Engineering is 14.88 times less risky than EHEALTH. It trades about 0.51 of its potential returns per unit of risk. EHEALTH is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 513.00 in EHEALTH on October 12, 2024 and sell it today you would earn a total of 426.00 from holding EHEALTH or generate 83.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Altair Engineering vs. EHEALTH
Performance |
| Timeline |
| Altair Engineering |
| EHEALTH |
Altair Engineering and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and EHEALTH
The main advantage of trading using opposite Altair Engineering and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| Altair Engineering vs. OPERA SOFTWARE | Altair Engineering vs. Playtech plc | Altair Engineering vs. PSI Software AG | Altair Engineering vs. FORMPIPE SOFTWARE AB |
| EHEALTH vs. Westinghouse Air Brake | EHEALTH vs. Altair Engineering | EHEALTH vs. Ultra Clean Holdings | EHEALTH vs. Rayonier Advanced Materials |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |