Correlation Between Altair Engineering and Confluent
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Confluent 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 Confluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Confluent, you can compare the effects of market volatilities on Altair Engineering and Confluent 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 Confluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Confluent.
Diversification Opportunities for Altair Engineering and Confluent
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altair and Confluent is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent 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 Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of Altair Engineering i.e., Altair Engineering and Confluent go up and down completely randomly.
Pair Corralation between Altair Engineering and Confluent
Given the investment horizon of 90 days Altair Engineering is expected to generate 2.52 times less return on investment than Confluent. But when comparing it to its historical volatility, Altair Engineering is 1.6 times less risky than Confluent. It trades about 0.12 of its potential returns per unit of risk. Confluent is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,136 in Confluent on August 23, 2024 and sell it today you would earn a total of 925.00 from holding Confluent or generate 43.31% 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. Confluent
Performance |
| Timeline |
| Altair Engineering |
| Confluent |
Altair Engineering and Confluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Confluent
The main advantage of trading using opposite Altair Engineering and Confluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Confluent 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 Confluent will offset losses from the drop in Confluent's long position.| Altair Engineering vs. Global Blue Group | Altair Engineering vs. EverCommerce | Altair Engineering vs. CSG Systems International | Altair Engineering vs. Consensus Cloud Solutions |
| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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