Correlation Between Altair Engineering and Realty Income
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Realty Income 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 Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Realty Income, you can compare the effects of market volatilities on Altair Engineering and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Realty Income.
Diversification Opportunities for Altair Engineering and Realty Income
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altair and Realty is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Altair Engineering i.e., Altair Engineering and Realty Income go up and down completely randomly.
Pair Corralation between Altair Engineering and Realty Income
Assuming the 90 days horizon Altair Engineering is expected to generate 0.56 times more return on investment than Realty Income. However, Altair Engineering is 1.79 times less risky than Realty Income. It trades about 0.5 of its potential returns per unit of risk. Realty Income is currently generating about -0.1 per unit of risk. If you would invest 10,000 in Altair Engineering on October 7, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Realty Income
Performance |
| Timeline |
| Altair Engineering |
| Realty Income |
Altair Engineering and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Realty Income
The main advantage of trading using opposite Altair Engineering and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Altair Engineering vs. Axway Software SA | Altair Engineering vs. DATA MODUL | Altair Engineering vs. GBS Software AG | Altair Engineering vs. Check Point Software |
| Realty Income vs. OPKO HEALTH | Realty Income vs. Ribbon Communications | Realty Income vs. Cogent Communications Holdings | Realty Income vs. FONIX MOBILE PLC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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