Correlation Between Altair Engineering and Five9
Can any of the company-specific risk be diversified away by investing in both Altair Engineering and Five9 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 Five9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Five9 Inc, you can compare the effects of market volatilities on Altair Engineering and Five9 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 Five9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Five9.
Diversification Opportunities for Altair Engineering and Five9
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altair and Five9 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Five9 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five9 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 Five9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five9 Inc has no effect on the direction of Altair Engineering i.e., Altair Engineering and Five9 go up and down completely randomly.
Pair Corralation between Altair Engineering and Five9
Given the investment horizon of 90 days Altair Engineering is expected to generate 0.68 times more return on investment than Five9. However, Altair Engineering is 1.47 times less risky than Five9. It trades about 0.09 of its potential returns per unit of risk. Five9 Inc is currently generating about -0.01 per unit of risk. If you would invest 4,746 in Altair Engineering on August 27, 2024 and sell it today you would earn a total of 5,774 from holding Altair Engineering or generate 121.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Five9 Inc
Performance |
| Timeline |
| Altair Engineering |
| Five9 Inc |
Altair Engineering and Five9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Five9
The main advantage of trading using opposite Altair Engineering and Five9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering position performs unexpectedly, Five9 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 Five9 will offset losses from the drop in Five9'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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